- Chainlink’s high development and sustained accumulation presented a bullish case for investors
- Daily price chart hinted at bearishness, but this could change if $17.5 is breached
Chainlink [LINK] led the DeFi sector in terms of development activity over the past month. In fact, Santiment analyst Brian noted that the pecking order in terms of volume of dev activity has not changed among the DeFi projects.
Source: Santiment Insights
The price action chart revealed that the bulls were able to defend the $14.4-support, but unable to surpass the $17.45-resistance level.
This seemed to be a sign that sentiment did not favor the buyers much. Hence, the question – Do the on-chain metrics hint at a bullish reversal?
Chainlink holders over the past three months at a sizeable loss
Source: Santiment
The 90-day mean coin age saw a strong uptrend in January, but it has slowed down over the past month. It still maintained its upward trajectory. Here, the MCA metric measures the average number of days that LINK tokens stayed within their current wallets.
A rising trope indicated accumulation across the network. This can also be seen as a bullish signal for Chainlink. Meanwhile, its MVRV ratio was at -26.29%, showing that holders within the past three months were down 27% on average.
Combined with the rising MCA, it gave a buy signal for the token. The dormant circulation has been quiet in recent weeks, showing no spikes in token transfers which could point to selling pressure.
Source: Santiment
The supply distribution chart revealed that the number of addresses with over a million LINK in their stash has been dwindling. The other holders, from retail to whale, were rising in number. The exceptions were the 10k-100k LINK holders. They have been trending south over the past two weeks, with this demographic lacking a clear trend since December.
This seemed to back the accumulation idea that the mean coin age presented. Together, this can help Chainlink climb past the $17.45 resistance on the charts.
Source: LINK/USDT on TradingView
The resistance zone around $18 had served as support last month, but is now acting as resistance. The MACD showed that momentum was predominantly bearish, though it saw some green bars on the histogram due to the recent price hike.
Finally, the A/D indicator has trended higher – Another piece of reinforcement for the idea of Chainlink accumulation during this consolidatory price action. Based on the November-December 2024 rally to $30.94, Fibonacci retracement levels were plotted. Here, the $14.54-level was the 78.6% retracement level, marking it as a significant demand zone.
