Categories: Forex News
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2024-02-02 9:25 AM

Chainlink Hits Two-Year Peak After Dormant Coins Spark Surge

  • Chainlink (LINK) experienced a significant price surge of over 17%, reaching its highest value since January 2021, driven by the movement of long-dormant coins.
  • On-chain data highlighted a 404% increase in LINK's Age Consumed metric, indicating a substantial volume of previously inactive tokens changing hands, suggesting a shift in market dynamics.
  • The rally resulted in a decrease in wallet numbers holding LINK, with technical indicators like the Chaikin Money Flow and Aroon Indicator signaling strong market momentum and potential for further price increases.
By Nonhlanhla

Chainlink (LINK) has experienced a remarkable surge, escalating by over 17% on Friday to its highest point since January 2021. This significant price increase is attributed to the unexpected movement of long-dormant coins, marking a pivotal moment for the cryptocurrency, particularly for South African investors keen on the digital currency market.

The momentum behind Chainlink’s ascent is confirmed by critical indicators, suggesting a robust upward trajectory may continue if the market sentiment remains positive. This is a vital development, indicating a robust interest and confidence in LINK within the South African crypto community and beyond.

Santiment, a renowned on-chain data provider, revealed that Chainlink’s Age Consumed metric soared to 5.35 billion on Tuesday. This represents a staggering 404% rise within a day, from the previous figure of 1.06 billion. The Age Consumed metric is crucial as it measures the volume of tokens exchanged, factoring in how long they had been idle. A spike in this metric signifies a significant volume of tokens being mobilized after a period of inactivity, often indicating a substantial market shift.

The reactivation of these dormant tokens typically doesn’t occur without reason. It suggests a notable change in market dynamics, potentially signaling a pivot in the asset’s price direction. For Chainlink, this movement preceded a notable increase in its value, suggesting the market had reached a turning point at a price bottom of $15.45 on Tuesday. Currently trading at $18.07, LINK’s value has surged by 17%, showcasing a strong recovery and attracting attention from South African investors monitoring global cryptocurrency trends.

Following this price rally, a decrease in the number of wallets holding LINK was observed, a phenomenon Santiment attributes to the emergence of fear, uncertainty, and doubt (FUD) among holders. This contraction often precedes a price increase, as observed in LINK’s recent performance.

The technical analysis of LINK’s daily chart further underscores the currency’s bullish momentum. The Chaikin Money Flow (CMF) indicator, currently positive, suggests liquidity inflow, likely fuelling further price increases. Moreover, Chainlink’s Aroon Indicator points to a sustained strong uptrend, with the Aroon Up Line hitting 100%, a clear sign of market strength.

Additionally, LINK’s Relative Strength Index (RSI) and Money Flow Index (MFI) both stand above their midlines, indicating a prevailing buyer’s market over selling for profit. With the token’s weighted sentiment remaining positive, Chainlink’s value could climb even higher before any potential corrections.

For South African investors and the broader market, Chainlink’s recent performance is not just a testament to its resilience and potential but also a beacon for the evolving dynamics of the cryptocurrency landscape.

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Nonhlanhla

Nonhlanhla P Dube is a senior news reporter. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her on: Email: nonhlanhla@rateweb.co.za

Tags: Chainlink