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Chainlink Transaction Volume and Users Rise In December — Will LINK’s Price End Its Rollercoaster Trend?

Last Updated December 27, 2023 2:58 PM
Nikola Lazic
Last Updated December 27, 2023 2:58 PM

Key Takeaways

  • LINK reached its yearly high of $17 on December 9.
  • Sideway movement occurred but on-chain data suggest an undervaluation.
  • Chart analysis points at $20 for the next target

Chainlink (LINK) has experienced notable fluctuations in its market dynamics recently. Since November, LINK has been trading within a higher timeframe range, following a significant rally in October. Despite these gains, the Network Value to Transactions (NVT) Ratio, a key metric used to evaluate the token’s valuation, has declined since September. 

NVT showing surge
LINK NVT Ratio

This decline in the NVT ratio, which measures the market cap against on-chain transaction volume, suggests a potential undervaluation of LINK and indicates strong user adoption. Is this an insight of a starting surge? 

ChainLink On-chain data

Analyzing various on-chain metrics, observed that while Chainlink‘s development activity decreased in December, likely due to the festive season, its social volume and transaction volume showed significant activity. 

LINK Santiment data
Santiment data

According to the data from Santiment, particularly notable was the increase in active addresses from September to mid-November and a spike in early December, pointing to heightened network activity and adoption.

The price of LINK  has been trading within a range of $13.3 to $16.6. During this period, the Market Value to Realized Value (MVRV) ratio, another valuation metric, indicated that the asset might be overvalued as it increased along with the price. 

However, it has since declined towards zero, suggesting a possible bullish outlook for LINK in the upcoming months. 

LINK Price Analysis 

From late July 2023, when the price of LINK dipped below $5, which was its lowest point since the all-time high, we saw the start of a larger uptrend. Measured to its highest point of $17.20 reached December 9, this was an increase of 250%. 

Daily chart
Another high of $20 expected

Judging from the wave structure, this was wave 3 from the five-wave impulse, and the following sideways range forming a symmetrical triangle is wave 4. This means that after its completion, one more high would occur for wave 5 to complete this pattern.

The next significant resistance is at $20, our target in the near term, but LINK might be ready for a larger correction after it ends. If we see the first uptrend in the next multi-year bull cycle for the price of LINK, after completing its first five-wave uptrend, a three-wave correction should follow.

Its purpose is to establish a higher support plateau and will likely lead the price of LINK back to the $12 area where the 0.5 Fibonacci retracement level is. If this plates out, it could indicate that in 2024, the price of LINK is headed for a major uptrend, resulting in revisiting its all-time high and potentially making a new one.

But to have a reliable projection, first, we must see where the current uptrend ends and the depth of the expected retracement. 

Disclaimers

Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.

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