Is Chainlink Price Set to Trigger Bullish Reversal as MVRV Flashes Buy Signal?

Chainlink price is on the verge of a major bullish reversal after its Market Value to Realized Value (MVRV) ratio flipped negative. Historical trends indicate that this decline precedes a run-up that could lead to a 312% rally. 

This bullish setup presents a buy signal for LINK, which trades at $18.08 today with a marginal decline of 0.85%. 

Chainlink Price Could Explode 300% to $54

According to analyst Ali Charts on X, Chainlink price tends to rebound whenever the MVRV drops below -16%. This indicator has since dropped to -16.3%, indicating that most traders are sitting at a loss. 

In his analysis, Ali Charts noted that in August 2023, LINK rallied by 312% within four months after the MVRV bottomed. Similar gains, albeit smaller, were also seen in 2024. If history rhymes and this dip signals a buying opportunity, LINK’s price today could be headed for a strong rebound. 

Whenever the MVRV drops below 0%,  like in this case, it leads to reduced selling pressure as traders become hesitant to sell at a loss. Additionally, this drop could mark the start of an accumulation phase by buyers looking to buy at low prices. This setup gives it the leeway for a rebound, with a liberal Chainlink price forecast using past MVRV trends suggesting an over 300% rally. 

Key Levels to Watch in Chainlink Price

According to IntoTheBlock’s In Out of the Money indicator, most traders that are Out of the Money (in losses) bought LINK at the $20-26 zone. 43,000 traders also bought 70M LINK between $18.27 and $19.88, with this level acting as an immediate resistance level. 

The altcoin’s potential rally as outlined by the MVRV ratio depends on the traders who bought at these key zones not selling once they become profitable. 

On the other hand, the $14.40-$16.93 zone where 157M LINK tokens were bought acts as a strong support. Due to the high volumes accumulated at these levels, it could act as a buying zone, with buyers defending this support if LINK retraces. 

Whales Accumulate $20M LINK: Time for a Breakout?

Chainlink whales are accumulating at the current price after purchasing 1.01M LINK tokens valued at around $20M. This purchase comes amid LINK’s rangebound trading between the $17 and $19 price levels. 

LINK’s breakout from this range is contingent upon a swing above the middle Bollinger band at $19.52. In case of a breakout, LINK could resume an upward momentum. 

Furthermore, the Moving Average Convergence Divergence (MACD) line has converged with the signal line from below but lacks a clear breakout. Traders should watch for a move of the MACD line above the signal line, to confirm a buy signal. 

The recent whale purchase will not only aid LINK’s breakout from consolidation but also mark the start of an accumulation phase. This could precede a strong breakout for Chainlink price towards $23.