Chainlink (LINK) has recently witnessed its largest trader capitulation spike of the year, suggesting that weak hands are releasing significant levels of coins. This event indicates a possible market bottom as traders’ fear, uncertainty, and doubt (FUD) increase. On a specific day, realized losses amounted to $60 million in LINK, marking the highest realized loss day of 2024. As per Santiment data, this figure highlights the severity of trader FUD and potentially indicates a turning point in the market.
The $60 million in realized losses on a single day demonstrates the significant trader capitulation occurring within the Chainlink market. This event often signals that less confident traders are selling their holdings at a loss, which can be a precursor to a market bottom. Historically, such spikes in realized losses are associated with a peak in trader pessimism, which may lead to a rebound in prices as selling pressure eases.
The chart also references a similar event on April 13th, when a huge realized loss spike occurred. Following this event, LINK prices jumped by 17% over the next 10 days. This historical precedent suggests that large realized losses can potentially mark a turning point, leading to a subsequent price recovery. Traders giving up and selling at a loss could mean that the market is near its lowest point, setting the stage for a potential rebound.
The movement of dormant coins, which have been inactive for a long period, is another notable factor. Such movements usually indicate a change in market sentiment or preparation for a significant market move. In this context, dormant coins waking up and moving could signify traders’ anticipation of a market shift. This behavior further supports the likelihood of a local bottom for Chainlink.
Whales Snap Up 6.2M LINK Amidst Price Dip – What’s Next for Chainlink?Currently, Chainlink (LINK) is priced at $12.94, with a 24-hour trading volume of $433,145,370. LINK has declined 1.5% in the last 24 hours and has seen a decline of 11% over the past 7 days.
This performance places Chainlink below the global cryptocurrency market, which is down -3.10%, and the GMCI 30 Index cryptocurrencies, which remain stable. The recent capitulation and realized losses reflect significant trader FUD. However, historical precedents and the movement of dormant coins suggest a potential for market recovery, increasing the likelihood of a local bottom for Chainlink.
