Chainlink Dips 40% as Whales Invest $20M, Rebound Possible?

• Chainlink price slumped 40% as network usage and activity declined.
• Whales acquired over $20 million in LINK tokens within 24 hours.
• LINK must surpass $19 to target the next resistance at $23.70.

Chainlink (LINK) has dropped 39% over the past month, and traders are nervous. The latest dip saw LINK go from $19.20 to $17.28 before stabilizing. Currently, LINK is at $18.05, up 0.06% in the last 24 hours. The market is mixed, waiting for more signals. Many watch global economic events, especially the Federal Reserve’s upcoming announcements.

Network Growth Shrinking

One reason for the downtrend is the decreasing network growth. Since November 30th, the Chainlink network has been shrinking, with fewer new users and less engagement. Reduced network growth usually means less demand and more downward pressure on the price. This is why LINK has gone from over $30 to its current level. Analysts say a bounce back may need renewed network growth and more user participation.

Profitability Metrics Suggest, Market Is Exhausted

Market Value to Realized Value (MVRV), which measures trader profitability, is at -16.3%. This means most buyers’ unrealized losses in the last 30 days have been around 16%. 

Historically, MVRV has been below 16% in the market bottoms for Chainlink. Previous instances have seen price bounce back with gains of 312%, 64% and 61%. While the pattern is hopeful for a recovery, many are still cautious and waiting for price action to be confirmed.

Whales Buy LINK As Price Diverges

Despite the overall sell-off, whales are buying LINK. Data shows whales bought over 1.10 million LINK worth over $20 million in the last 24 hours. Crypto analyst Ali said this is a sign of growing confidence from large holders. Whale accumulation often means price recovery is coming, but retail is still hesitant. Continued whale buying could be a short-term price pump.

Crucial Price Levels and Market Outlook

Market participants are watching Chainlink price action at key resistance levels. LINK is holding support at $15.50 for now, as it has held here during this price decline.

LINK needs this support if it wants to bounce back in the market. LINK needs to go above $19 before it can target $23.70. IntoTheBlock data shows LINK holders at profit are 75.33%, holding between $14.40 and $16.93. 

Sellers are trying to break even between $18.27 and $20.79. Market participants watch closely as whale activity increases as LINK approaches the support level. The next few days will tell if Chainlink will recover or drop.