On-chain analyst explains why Chainlink (LINK) is in a "parabolic advance"
The crypto market has been very lively over the past week. Altcoins from Cardano (ADA) and Compound (COMP) to VeChain (VET) and Chainlink (LINK) all outperform Bitcoin. They literally outperform the market leader by dozens of percent.
Some hot crypto assets have peaked: COMP fell 50 percent from its all-time high, and the ADA rally abruptly stopped at $ 0.14.
Still, there is an analyst who thinks Chainlink will buck the trend by citing technical and on-chain indicators that indicate that LINK is on a "parabolic advance".
Indicators that indicate Chainlink is in a “parabolic advance”
According to Cole Garner, an on-chain analyst and forex trader, Chainlink is likely to be in the midst of a "full-blown parabolic advance" after making new highs after another in recent days.
When extrapolating the price action from LINK's last big bull run in 2019, he suggested that the cryptocurrency still had room to recover at least 50 percent against Bitcoin.
LINK's Mean Dollar Invested Age is curving down. Every time this metric curled down in the past year, the cryptocurrency continued to recover and develop parabolically.
The amount of altcoins on the exchanges has been falling over the past two years, indicating a decrease in potential selling pressure.
LINK's on-chain volume is still not at a bubble level.
Chainlink is the leading “emerging trend” in crypto social media circles.
But not all of them are bullish
Despite these signs, not everyone is convinced that Chainlink's performance is sustainable. Blockchain analytics company Santiment reported on July 5 that the ratio of LINK's market value to realized value (MVRV) is at an all-time high. This has only worsened since then, as the altcoin continued to rise.
This indicator, at such a high level, indicates that "almost everyone who holds LINK makes a profit", which Santiment calls a "dangerous" tendency.
Shortly after Santiment released the data, Glassnode found that LINK worth $ 15 million was sent to Binance in 5,000 different transactions. Some thought that this was a catalyst for a dump, but a reset never really took place.
The problem with the MVRV indicator is that it assumes that a large proportion of investors will ultimately make profits from the trades. However, like in the case of Bitcoin and other cryptocurrencies, there are often investors who are willing to keep their assets at any price, which makes the MVRV indicator a little redundant.