- Analyst Nicholas Merten is predicting a downward movement for Chainlink (LINK) and is suggesting investors to consider taking profits.
- In contrast, analyst David Miller points to on-chain data showing that LINK whales continue to buy in despite the pullback.
After Chainlink (LINK) reached unprecedented all-time highs with the last few weeks, the price suddenly fell on Monday. Now, analysts are divided on future scenarios, as LINK has managed to recover and consolidate above the important support of $16. At the time of publication, LINK is trading at $16.48 and has moved sideways (-0.02%) in the last 24 hours.
On the weekly chart, LINK is showing a small loss of 0.59%, while it still posts a massive gain of 127.2% on the monthly chart. With that, LINK remains the biggest winner on the top 10 by market cap followed by Ethereum with 73.6%, XRP with 49.1% and Litecoin with 47.7% over the last month. In total, LINK has had a significant increase of 1,015% in 2020.
However, following the latest downtrend, renowned analyst Nicholas Merten has made a bearish prediction for LINK. In a new episode of DataDash, called “The Bull Cycle is on Fire”, Merten recommended that LINK investors should start considering taking profits, believes that LINK could continue its downward trend:
It’s beautiful to see Chainlink starting to take on this vertical price action. Again, I’ve emphasized the point here that as much as I don’t want to fight the trend here – I’m not trying to short this – if you hold some LINK, I wouldn’t say to just sell it all or anything like that, but start raising a stop in this case on some of your position. Take a partial share. Consider here that we might start to get a little bit of a pullback here.
Continuing his recommendations to LINK investors, Merten said that whales and a high percentage of traders will start liquidating their positions to make profits. In that sense, Merten recommended LINK holders to play “smart money”:
Bear in mind that there are going to be a lot of investors and traders who are probably going to be locking in profits here. A little bit of smart money taking profits. And then we’re probably going to get a nice little pullback here.
Again, not trying to rag on LINK here, it’s just knowing in this case what parts of the crypto sector have room to grow or might be overextended (…) It looks like they’re ready for a cooldown after having a couple of weeks of near vertical price action.
Optimistic predictions for LINK
However, Merten’s forecast is contrary to the analysis of other traders. Based on data from Glassnode, crypto-community member David Miller advised investors to continue to buy LINK. As can be seen in the chart below, even after the price decline, LINK still has reached a 2-year high in the percent balance of top 1% LINK addresses, at 79.432%.
📈 $LINK Percent Balance of Top 1% Addresses just reached a 2-year high of 79.432%
Previous 2-year high of 79.346% was observed on 16 August 2020
View metric:https://t.co/Yu7MgXuKe8 pic.twitter.com/68ylT1s8Y5
— glassnode alerts (@glassnodealerts) August 18, 2020
In other words, LINK whales have increased their balances and continue to accumulate the cryptocurrency. Miller said that LINK’s recent correction is “a buying opportunity” and added that the time to sell will come when the 1% get “scared” and start liquidating their positions.
However, according to the analysis firm Santiment, LINK’s price is in a volatile moment. According to the Token Age Consumed metric, Santiment stated the following:
Coinciding with the 16% drop in LINK (which many refer to as the sauce buying opportunity), the highest token age consumption peak in 3 months occurred 7 hours ago. The price is volatile, as is the corresponding result of these peaks.
Santiment added that increases in the referred metric usually precede price direction changes. Therefore, a spike after a crash can be interpreted as a bullish signal for LINK.
