- Chainlink’s MVRV 30D indicator, historically predictive, suggests a possible correction as it surpasses 20%.
- An unexpected 21% rally led to significant liquidations, primarily affecting bearish short positions.
- Investors are closely watching for a weekly candlestick close below $7.69 to confirm or invalidate the bullish trend.
Chainlink (LINK), a cryptocurrency that has been on a remarkable run, is currently at a crossroads, and investors are holding their breath as they await the next move. Recent data from @santimentfeed has sent shockwaves through the crypto community, indicating that the Chainlink MVRV 30D has surpassed 20% once again. Historically, this has been a signal for a steep correction, according to Ali, a crypto market and technical analyst, prompting many to wonder if the bullish trend will continue or if a significant downturn is on the horizon.
Data from @santimentfeed shows that the last three times #Chainlink MVRV 30D surpassed 20%, $LINK underwent a steep correction!
— Ali (@ali_charts) October 22, 2023
Notice that #LINK MVRV 30D recently surpassed 20%, suggesting an imminent correction. pic.twitter.com/CJ4ROy9EyK
The 22nd of October witnessed a sudden and explosive 21% rally in Chainlink’s price, catching many investors off guard. This unexpected surge has fueled speculation on the X platform, with numerous investors forecasting that it could mark the beginning of an uptrend. However, the surge came at a cost, with approximately $3.78 million worth of positions liquidated within a mere 12-hour window.
Interestingly, the majority of these liquidated positions, totaling $3.38 million, belonged to bearish short positions, while only $406,000 worth of long positions were wiped out. This lopsided liquidation suggests that bears were betting heavily against Chainlink, and the sudden surge caught them by surprise.
As the crypto market continues to be highly unpredictable, two possible scenarios could unfold. If the weekend rally proves to be more than just a fleeting moment and investors continue to bet on Chainlink’s upward trajectory, the market might witness further gains. However, if profit-taking becomes the order of the day, it could trigger a sell-off that undoes the recent gains.
In the event of a significant sell-off, all eyes should be on the weekly candlestick. A candlestick close below $7.69 would signal the invalidation of the bullish thesis, potentially leading to a shift in sentiment among investors.
At the time of writing, Chainlink is trading at $9.43, showing a 5.57% increase in the last 24 hours. The 24-hour trading volume stands at $911,502,277, highlighting the coin’s active market presence. Chainlink currently holds the 14th position in CoinMarketCap rankings, with a live market capitalization of $5,249,465,231.
