The cryptocurrency market has been experiencing a recovery phase following a recent dip, and this positive momentum has been driving up the price of Chainlink (LINK). The trading interest in LINK has been on the rise as inflation in the US shows signs of slowing down. However, there are concerns that LINK may soon face a correction as it becomes overvalued due to a drop in crucial on-chain data.
Despite the recent recovery rally of Chainlink, the MVRV ratio for LINK has dropped from 1.42 to 1.13, indicating that the current price surge may be driven more by speculation than real value gains. This has led to Chainlink being considered overvalued as it moves above resistance levels.
Despite the potential for a correction, Chainlink remains a top altcoin with strong development activity and technical support. Large investors have been accumulating LINK, with 3 million purchases in the last five days, and trading volumes have been high, indicating strong investor confidence. Additionally, open interest has surged by 35% to $580 million, showing increasing confidence among traders.
Looking ahead, Chainlink’s price has been trending upwards towards the $15 resistance level, supported by significant buying interest. The price of LINK currently stands at $14.4 after a 11.52% increase over the past 24 hours. However, there is resistance at around $14.7, and with the RSI nearing the overbought threshold at 78, a correction may be on the horizon.
If LINK fails to break through the $14.7-$15 range, its price could fall to around $11.7, with a further drop potentially leading to a significant correction. The long/short ratio for LINK is currently at 2.17, indicating a strong buying trend, but there is a risk of a fake breakout. Despite these challenges, 68.5% of traders anticipate a further upward movement in LINK’s price.
In conclusion, Chainlink’s price recovery has been impressive, but caution is advised as the altcoin may face a correction due to overvaluation. Investors should closely monitor key resistance levels and market indicators to make informed decisions about their LINK holdings.