#LNKUSDT ( Chainlink ) - Set for Correction as Rally Overextends Bullishness

Chainlink’s (LINK) price broke out of the consolidation and marked a monthly high of less than a week

Chainlink (LINK) Set for Correction as Rally Overextends Bullishness

May 20, 2024 by Aaryamann Shrivastava, Ryan James

In Brief

Chainlink's price has risen by almost 30% in the span of just five days, trading close to $17.

The RSI above the 70.0 threshold shows that LINK has been overbought during this rally.

The MVRV ratio also suggests potential profit taking at the hands of LINK holders.

Chainlink’s (LINK) price broke out of the consolidation and marked a monthly high of less than a week.

However, this may lead to LINK holders moving to sell their holdings before they lose the chance to secure their gains.

Chainlink Investors May Book Profits

Chainlink’s price is $16.8 after rising nearly 30% this past week. However, this resulted in the altcoin hitting saturation, historically synonymous with corrections.

This is evident in the Relative Strength Index (RSI). RSI is a momentum oscillator that measures the speed and change of price movements. It ranges from 0 to 100, with values above 70 indicating overbought conditions and below 30 indicating oversold conditions.

Currently, the RSI is above 70, suggesting LINK is overbought on the 12-hour chart. This happened last in February, after which the rally took a break. The same could be the fate of Chainlink’s price as well.

Plus, it could face additional discomfort from its investors should it move to sell, which is a probable outcome. This is because the Market Value to Realized Value (MVRV) signals profit-taking.

The MVRV ratio tracks investor gains/losses. Chainlink’s 30-day MVRV of 16% suggests profit, possibly prompting selling. Historically, LINK tends to correct at MVRV levels of 10%- 20%, labeling this a risky zone.