The value of Chainlink (LINK) experienced a significant increase of 20% due to the Bitcoin halving event. However, the altcoin is now facing a major obstacle that has posed challenges in the past.
Chainlink investors may be inclined to sell
As the price of Chainlink rises, investors are once again entering a profitable position, which may motivate them to sell their tokens. The recent correction has caused LINK’s overall supply of earnings to drop from 84% to 70%.
This decrease in supply amounts to approximately 82.18 million LINK tokens, worth around $1.3 billion. Currently, all these tokens have returned to their value prior to the fall. Over the past two days, the percentage of profits offered has increased and has now reached 84%.
Chainlink’s Profit Share of Supply. Source: Santiment
This dynamic could potentially trigger sales as some investors seek to protect themselves from further decline by taking profits. Consequently, this may lead to a drop in price.
The MVRV (Realized Value Ratio) indicator tracks investor gains/losses. Chainlink’s 7-day MVRV of 11% indicates potential gains that may drive sales. Historically, LINK has experienced corrections at MVRV levels of 8 to 15%. Therefore, the current price is situated within a precarious zone.
MVRV coefficient. Source: Santiment
In the short-term timeframe, a decline has been frequently observed in this range, which is now the expected scenario for LINK.
LINK Forecast: Breaking the Barrier
Over the weekend, the price of Chainlink rose by 20% to reach $15.8. Just below this point lies a resistance level that LINK has previously struggled to overcome.
The price is once again retreating from the $15.6 resistance level, potentially testing support levels at $14.6 and $13.4. Should LINK holders decide to sell this time around, a potential drop could push the price back towards the previously mentioned support level.
12-hour chart LINK/USDT. Source: TradingView
However, if the resistance at $15.6 is successfully broken and turned into support, a recovery could be possible.
The next critical resistance level is at $18, which Chainlink could reach if it manages to break above $17. This would signal a reversal of the bearish scenario.
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