30-day Chainlink MVRV ratio and TD sequential indicator

The declining 30-day Chainlink MVRV (market value to realized value) ratio and TD sequential indicator suggest that LINK is on the verge of breaking out to new highs. 

Leading up to the fourth Bitcoin halving event, the crypto market has experienced significant volatility with several cryptocurrencies exploring new lows. Chainlink’s native currency LINK, BTC, SHIB, XRP and ADA fall among the cryptoassets witnessing a multi-week price downtrend.

In particular, LINK has plummeted over 24% in the past 30 days at the time of writing, leading to a significant decline in its 30-day MVRV ratio. 

30-Day Chainlink MVRV bullish for LINK

For the uninitiated, the MVRV ratio compares the market capitalization of a cryptocurrency to its realized value, providing insights into whether an asset is overvalued or undervalued relative to its historical trading activity.

Top crypto analyst Ali Martinez spotted this technical indicator on Thursday, buttressing its historical correlation with LINK’s price action. Citing data from August 2022, Martinez highlighted that whenever the Chainlink MVRV ratio fell below -12.24%, it consistently culminated in a rally in the price of LINK, averaging returns of around 50%. 

In other words, Martinez implied that a 30-day Chainlink MVRV Ratio below -12.24% typically signals a prime opportunity to buy LINK. As of April 17, 2024, this ratio stood at -17.54%. “This could be another chance to buy the LINK dip,” the top analyst suggested. 

TD Sequential Indicator Presents a Buy Signal

Another technical pointer showing that LINK could be in for a massive rally in the coming days is the TD Sequential indicator. Developed by Tom DeMark, this indicator is a technical analysis tool used to identify potential trend reversals in financial markets. 

The TD Sequential indicator is based on the concept that markets tend to move in waves, and by analyzing the sequence of highs and lows, it attempts to predict when a trend is nearing exhaustion and may reverse direction. The indicator consists of a series of countdowns and setups, each with specific rules for identification. 

Per a Thursday analysis using this indicator,  Martinez deduced that LINK may experience a significant upswing in the coming 1 – 4 days thus, presenting a buy signal on its daily chart. “The last three buy signals from this indicator since December 2023 have led to gains of 27%, 32%, and 8%, respectively,” the top analyst said

Ranked 18th by market capitalization, LINK is trading at $13.30 at press time, translating to a price gain of about 0.3% in the past 24 hours. Notably, LINK price has plummeted by over 20% in the past seven and 30 days, suggesting that the large-cap cryptocurrency may be oversold. 

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