- Cryptocurrency enthusiasts debate Chainlink’s sustainability following its remarkable 24% value surge in just one week.
- Despite optimism, decreased trading volume and speculative factors raise questions about the longevity of LINK’s rally.
Chainlink (LINK) has captured the attention of cryptocurrency investors with a remarkable 24% increase in its value in just seven days. This upward trend has sparked a debate regarding its sustainability and whether LINK followers can maintain this momentum.
📊 #Crypto market caps have edged up +0.5% over the past week, despite trading volumes dropping off -20.3% compared to the week prior. Highlight assets have included $FLR, $RON, $LINK, $TAO, and $RNDR. #Bitcoin continues seeing less attention as eyes turn to pumping #altcoins. pic.twitter.com/jMvJSTdV7c
— Santiment (@santimentfeed) February 5, 2024
Since November 17th, LINK has experienced significant fluctuations in its trading activity, ranging from $12.85 to $16.6. A noteworthy milestone was reached on February 1st when LINK concluded a trading session above $16.6, defying the established trading range.
Santiment’s analysis highlights growth in LINK’s social media activity and an increase in Open Interest in futures. These data imply optimism in the market, albeit with some caution.
It is important to mention that, according to Santiment, cryptocurrency trading volume decreased by 20.3% compared to the previous week. This data suggests that LINK’s increase was not reflected across the entire altcoin sector.
The possibility of a temporary surge before a market value decline is real, especially with Bitcoin’s [BTC] resistance in the $43,000 to $44,000 range.
Santiment’s analysis also reveals a decrease in LINK’s development activity and the coin’s average age. Reduced development activity may cause concern among investors, while a decrease in the coin’s average age, combined with rising prices, indicates that holders may be looking to capitalize on their gains.
The increase in Open Interest, along with the jump to $18.88, suggests that the surge may be more speculative than driven by solid market demand. Despite the Short-Term Funding Rate showing a bullish outlook, the combination of these factors indicates that LINK’s rally may be overvalued.
We may witness a reevaluation of previous peaks at $16.6 in the coming days. In this context, traders may find opportunities to take advantageous long positions.
