LINK active addresses are rising but this brings many concerns

Chainlink [LINK] was one such “strong and oversold” asset.

Investors’ emotions have been in a state of turmoil as Bitcoin [BTC] and Ether [ETH] plummeted by more than 8% and 6%, respectively, in a single day.

While the majority of the top 100 alts suffered significant price drops, some were struck worse than others.

Is LINK bullish wave coming soon?

LINK volumes have historically risen sharply after price reductions, and it looks like this pattern is repeating itself.

LINK was the 26th most valuable cryptocurrency by market capitalization at the time of publication, trading at $10.67. The cryptocurrency has dropped 10.75 percent in a single day and 12.50 percent in the last week.

However, at the time of publication, the token’s volume was increasing.

When it comes to crypto exchanges, we can see that LINK supply has generally been moving sideways, with some modest outflows.

This supports the “strong” aspect of Santiment’s rating, as it demonstrates that there hasn’t been much panic selling yet. Bearish pressure, on the other hand, has been consistent throughout April.

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The concern with LINK active addresses

In the meanwhile, similar to what we saw with the LINK volume measure, it’s evident that LINK active addresses tend to rise after price drops.

Although this occurred after the most recent drop, it is obvious that active addresses have been declining since the summer of 2021. Overall, this is not a good sign for the asset, as it indicates lower adoption and investor interest.

The single greatest source of concern right now is that, because LINK has already received unfavorable reactions from the community, it has become extremely vulnerable to investors departing the Chainlink market.

This is backed up by the fact that LINK traders are displaying the strongest levels of bearish sentiment in nearly three months.

Second, despite numerous attempts to save its investors’ money, LINK continues to lose money, with 528k investors losing money. These individuals account for 82 percent of all holders who have invested their time and money in Chainlink.

This is the most difficult position since LINK investors have never seen anything like it. The last time so many investors faced losses was in December of last year.

As a result, the market may experience fear and FUD, which, is a good thing. Capitulation and FUD indicators, according to the analytics platform, are already forming, which could flip the negative trend because prices typically bounce in these conditions.

It should be emphasized, however, that the cryptocurrency is being dragged back by the broader market because it has a 0.96 connection with Bitcoin. Since the king coin isn’t showing signs of recovery, it’s unlikely that Chainlink will rise significantly.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing