Chainlink price has surged 30% but key metric shows rally is unsustainable

Chainlink (LINK) price is trading around 30% higher this week after exploding nearly 13% on Monday. However, a key metric is pointing towards a reversal, which may have already started today. 

Fundamental analysis: MVRV at an all-time high

Chainlink has achieved outstanding results in terms of adoption over the past few weeks. Chainlink’s leading product, the oracles, are being used at some of the notable companies blockchains in the industry.  

As a result, the success with oracles has boosted the LINK’s price. Still, one of the core on-chain metrics indicates that LINK’s outstanding rally may be unsustainable in the long-term.

Santiment, crypto charts & market insights provider, issued a report  saying that the LINK’s market value to realized value (MVRV) ratio has also reached an all-time high.

What this actually means is that “almost everyone holding LINK is in profit,” which is allegedly not a good sign. This is because when so many investors are making a profit, there’s a good chance that a sell-off will happen as investors would like to secure that profit.

Another report from Glassnode confirmed Santiment’s data. Glassnode posted a chart on July 5 which shows that there’s been an enormous influx of LINK into Binance digital wallets, transferred in 5,000 different transactions. 

“Based on our exchange data, yesterday we observed almost 5,000 LINK transfers onto Binance wallets. This resulted in a daily net transfer volume into the exchange of more than $16 million USD worth of LINK – the largest we’ve seen so far,” according to Glassnode.

As for Chainlink’s recent developments, one of the leading crypto exchanges, Huobi, said it plans to leverage Chainlink nodes by incorporating it into its wallet service. The exchange added it will also integrate its data into Chainlink, letting developers leverage that data in smart contract apps.

Technical analysis: Link hits record highs

LINK/USD has skyrocketed this week to hit a fresh record high at $6.58. The price action has corrected around 5% from the high but it still trades above the $6 mark. 

As seen in the chart, LINK cleared the 127.2% Fibonacci resistance that sits just below the $6 handle. The buyers will need a weekly close above this level to open the door for new buyers to join and buy LINK. The next target is the Fibonacci extension at $7.13. 

Summary

LINK price has surged over 30% this week to print a fresh record high at $6.58. However, two reports from Glassnode and Santiment show that the current bullish run is unsustainable in the long-term.