Chainlink Drops, Is This The Right Time To Buy LINK?

Chainlink plunged, this is the right time to buy LINK (Photo; Doc. Methalic)

JAKARTA - Chainlink (LINK), one of the famous altcoins in the crypto market, experienced a sharp decline to reach its lowest point in 2024. This condition sparked debate among investors, whether this is the right time to buy LINK at a low price.

According to data from Santiment, negative market sentiment has suppressed the value of LINK, both in the short and long term. However, this major decline could be an opportunity for investors to take advantage of sluggish market conditions. Analysis using the MVRV metric (Market Value to Realized Value) shows that LINK is currently at an undervalued value, making it an attractive option to buy.

MVRV is an indicator that measures the market value of a token compared to the realized value. The negative value in this metric indicates that the token is undervalued and can be a good buying opportunity. In contrast, positive values show that the token is overvalued and may be sold by its holder to take advantage.

At the moment, LINK's MVRV ratio is down by 11% and 18.7% on a monthly and annual tuning basis, meaning that LINK is in a lucrative position to be purchased by short-term and long-term investors.

According to Ambcrypto's information, since early 2024, LINK has skyrocketed to 87%, from 12 US Dollars (approximately IDR 194,160) to 22 US Dollars (approximately IDR 355,960), providing 1.8-fold returns for those holding it for the first three months of this year. However, all of these profits were erased in the second quarter, and recovery efforts failed. At the time of writing, LINK was trading at 11.59 US Dollars (approximately IDR 187,526), approaching its lowest level in June of 11.05 (US DOlar (approximately IDR 178,789).

The US$11 level has been an important demand zone throughout the year, supporting Santiment's thesis that LINK is in a crucial zone. For traders focused on short-term trade, this condition could be an opportunity to take a buying position, especially if market sentiment improves.

If the market returns to positive, the nearest bullish target above 14 US Dollars (around Rp226,520) could offer a refund of 30%. However, if negative sentiment continues, LINK could fall below 10 US Dollars (around Rp161,800), which would worsen the overall condition of the crypto market.

Interestingly, several large whale' investors holding a large number of LINKs are starting to take up purchase positions at current low prices. Addresses holding between 1 million and 10 million LINKs have increased their accumulation since late July and continued to buy massively in August. Currently, they control about 19% of LINK's total supply.

However, selling pressure still comes from addresses holding 10,000 to 100,000 coins and 100,000 to 1 million coins. The two groups collectively control about 20% of the LINK supply, nearly equivalent to the whale' group that is accumulating.