Why LINK Investors Could See Tough Days Despite Many Reasons to Cheer

  • Chainlink has announced several collaborations despite falling prices and activity
  • The number of losing trades has increased as holders lose confidence in LINK

In a recent development, Chain link [LINK] announced that he would be collaborate with Arbitrum to help Layer 2 dApps grow in the DeFi space.

Read Chain link [LINK] Price prediction for 2023-24

New Partnerships Amid Crypto Winter

The collaboration would allow Arbitrum to use Chain linkautomate and scale dApps on its network. Along with this, Chainlink has also collaborated with other organizations in the Web3 space. The growing number of products and collaborations on the Chainlink network has kept developers busy.

According to data provided by Token Terminal, the number of daily active developers on Chain link continued to grow. This indicated that the developers were actively contributing to Chainlink’s GitHub.

Source: Token Terminal

Despite Chainlink’s multiple collaborations and increasing development activity, the network has continued to underperform in terms of the price and user activity.

From data collected by Santiment, it has been observed that the number of large addresses holding Chain link had declined. This was indicated by the decreasing percentage of LINK held by top addresses.

Subsequently, activity on Chainlink also declined. This development was observed due to the drop in daily active addresses on the Chainlink network.

Along with daily active addresses, the speed of LINK has also seen a decline. This indicated that the frequency with which LINK was traded between addresses had slowed down.

Source: Santiment

Link bears show their teeth

These factors could have caused Chainlink’s price to drop, which could also have affected the Market Value to Realized Value (MVRV) ratio.

The MVRV ratio has declined over the past few weeks, according to data from Santiment. A negative MVRV ratio indicated that if all LINK holders sold their holdings, they would do so at a loss.

It appeared that some LINK holders did just that. This has been demonstrated by the recent increase in loss trading volume. This surge in losing trades coupled with a drop in the MVRV ratio meant that more and more Chainlink holders were selling their LINK.

It appeared as if LINK had lost the confidence of the holders. Additionally, Chainlink failed to attract new addresses to its network. The slowdown in network growth in recent days is proof of this.

Decreasing network growth suggested that the number of new addresses that had transferred Chainlink for the first time had decreased.

Source: Santiment

At the time of this writing, LINK was trading at $5.96. Its price fell by 0.60% while its volume fell by 59.51% in the past 24 hours, according to CoinMarketCap.

Leave a Reply

Your email address will not be published. Required fields are marked *