Chainlink LINK Image via Cryptonewsfocus.comChainlink
  • Chainlink’s price recently surged to $16.21 but retraced, sparking renewed interest with over $450 million in trading volume.
  • Despite a 10.65% decline in the past week, indicators like the NVT and MVRV ratios suggest Chainlink is undervalued, potentially setting the stage for a rebound towards $17.70 to $18.57 in the near term.

Chainlink (LINK) jumped to $16.21 on June 12. Hours later, the price retraced, suggesting the initial hike was a false breakout. However, interest in the decentralized Oracle network’s native token heightened as trading volume soared above $450 million over the past 24 hours.

A Promising Scenario Ahead

As of this writing, the LINK price trades at $15.55, a 10.65% decrease in the last seven days. Despite the decline, LINK seems close to a position that may drive another uptrend. The Network Value to Transaction (NVT) Ratio shows proof of this. Another evidence is reflected in the Market Value to Realized Value (MVRV) Ratio.

NVT and MVRV Ratios

Network Value to Transaction (NVT) Ratio, which results from dividing the market cap by the volume transacted on-chain, indicates whether a network is undervalued or overvalued. According to data from Glassnode, Chainlink’s NVT Ratio fell to 93.04, suggesting that transaction volume has outperformed the project’s market cap. This inefficiency implies that the token is undervalued, as the network efficiently handles many transactions.

Market Value to Realized Value (MVRV) Ratio, another key metric, stands at -9.02% according to on-chain data provided by Santiment. This negative reading typically means that if LINK holders sell at the current price, the average return will result in a loss around the aforementioned region. Historical data shows that such declines have often provided a strategic entry point for market participants.

Historical Performance

For instance, the price of LINK has historically bounced back once the MVRV Ratio has closed between -6% and -21%. During these periods, LINK’s price has increased significantly, such as from $12.96 to $18.77 in less than two weeks in May.

Future Price Targets

Considering these factors, a price increase for LINK may be on the horizon. If validated, LINK’s price could gradually move up to $17.70 within a week or two, according to analysts. In a highly bullish market condition, the price may even rally above $18.57. However, these predictions must be considered with caution, as indications from the liquidation heatmap could potentially invalidate these projections.

Despite the recent decline in LINK’s price, the outlook remains positive, driven by strong on-chain fundamentals and historical patterns. The current scenario suggests that LINK is undervalued and poised for a potential uptrend, provided that market conditions remain favorable. As always, investors should conduct their own research or consult with a financial advisor before making any investment decisions.

By vivian

Vivian Njoroge is a seasoned crypto and blockchain news writer with a passion for decoding the complexities of the digital financial world. Armed with a keen eye for emerging trends and a knack for simplifying intricate concepts, Vivian brings a unique blend of expertise and enthusiasm to her writing. Her articles, characterized by clarity and depth, aim to keep readers abreast of the ever-evolving landscape of cryptocurrencies and blockchain technology.