Chainlink’s Bullish Momentum Complicated by Rising NVT Ratio Suggesting Possible Overvaluation Risks

  • Chainlink’s recent performance has stirred discussions among investors, fueled by significant developments in its market structure and on-chain metrics.

  • Despite a bearish overall market sentiment, Chainlink has shown signs of recovery, raising questions about its future trajectory amid accumulating interest.

  • As noted by leading analysts, “The recovery could turn into an uptrend that may push Chainlink’s value beyond $31.”

Explore Chainlink’s price recovery and market insights as the NVT ratio signals caution amidst growing on-chain activity and investor interest in LINK.

Chainlink’s Bullish Market Structure Signals Potential Upswing

Chainlink [LINK] recently flipped its daily market structure bullish, surpassing the key resistance level of $23.83 on January 17. This upward movement indicates a resurgence of demand and a positive shift in market momentum, suggesting that traders are increasingly confident in the coin’s potential for further gains. Notably, the retesting of the 61.8% Fibonacci level serves as a technical foundation for this bullish outlook.

Distribution of Daily Active Addresses Exhibits Recovery

In the face of recent market volatility, the daily active addresses for Chainlink users have signaled an increasing trend. Data shows a peaking activity in December, coinciding with prices nearing the $30 mark. Although this level was not maintained, the return to mid-December levels in early January points to a resilient user engagement.

Chainlink Santiment

Source: Santiment

NVT Ratio: An Indicator of Potential Overvaluation

The growing Network Value to Transactions (NVT) Ratio has raised concerns among investors about Chainlink’s current valuation. With the NVT indicating a disparity between on-chain transaction volumes and market cap, many analysts caution that LINK could be approaching overvaluation, evidenced by a sustained increase in the NVT ratio. This could signal a need for cautious trading strategies.

Chainlink NVT

Source: Glassnode

Conclusion

In summary, while Chainlink is showcasing a bullish market structure with growing user engagement and a recovery in development activity, the rising NVT ratio indicates potential caution regarding overvaluation. Investors should remain vigilant, balancing optimism with prudent risk management as the market evolves.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.

BREAKING NEWS

Bitcoin Set for Potential Gains: Analyzing 83% Success Rate During Chinese New Year

According to a recent analysis from Matrixport, Bitcoin has...

Circle Mints 2.5 Billion USDC on Solana, Cumulative Total Reaches 47.5 Billion in 2025

COINOTAG News reports that on January 24th, data from...

Solana’s XAI.space Presale Launches with 1178 SOL Raised for Innovative AI Agent Network

On January 24, XAI.space, the pioneering social network for...

Binance Futures Announces Launch of USD-Margined VINE USDT and PIPPIN USDT Perpetual Contracts

Binance Futures to Launch USD-Margined VINE USDT and PIPPIN...

Binance Pool Announces Exciting Litecoin (LTC) Mining Event with 18,000 Bellscoin (BELLS) Rewards

On January 24th, COINOTAG News reported a significant development...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img