15% weekly gains for LINK, even as hodlers keep selling – Reasons?

Key Takeaways

What has changed to inspire recent LINK gains?

The Bitwise and Franklin ETF news related to Chainlink ETFs, combined with buyer dominance in the spot market, led to a short-term rally.

Will the short-term Chainlink sentiment last?

Market-wide sentiment remains weak, and LINK might shift bearishly too over the coming days.

Chainlink [LINK] added 2.74% to its value over the last 24 hours. These gains came after news that the renowned asset manager Franklin Templeton was considering adding major altcoins, including Chainlink, to its crypto index ETF.

Bullish news, such as the DTCC moving the Bitwise Chainlink spot ETF to the pre-launch category, offered hope to holders in a market dominated by bears. While it will not be enough to alter the current pessimistic outlook significantly, it can inspire long-term confidence.

The price performance of 15.25% gains within a week has inspired short-term positivity around LINK. While the on-chain metrics were mixed at press time, they showed buying pressure has begun to take over in the spot market.

Spot taker dominance and Hodler offloading explained

Source: CryptoQuant

Since 22 November, the spot taker metric has shown that buyers have been in control. This metric measures the cumulative difference between spot taker buying and selling volume over 3 months.

When the spot taker CVD is positive and rising, it shows that the market is dominated by buyers. Since it is the taker orders that move the market, this may be a strong bullish sign for Chainlink investors.

Source: Glassnode

On the other hand, the LINK Hodler net position change has remained deeply negative. This metric measures the monthly change of long-term investors, or hodlers. Negative values indicate investors are cashing out.

This trend has been in place since the first week of October, when the LINK downtrend started. While it was losing strength, relatively, it still showed investors were cashing out in sizeable quantities.

This contrasted with the short-term price uptick and the recent swing in spot taker dominance.

Source: LINK/USDT on TradingView

Examining the 1-day LINK price chart, the selling pressure seemed to be pretty evident too. Despite the recent bounce, the MFI has been struggling to climb higher and had a reading of 35 at press time. This was not extreme, but indicated seller dominance and persistent downward momentum since October.

This lined up well with the hodler sell pressure. Overall, though there appeared to be a spark of short-term bullishness, the $16 supply zone remains key. It needs to be flipped to support before LINK holders can expect a strong uptrend to begin.