Crypto Analyst Says One Ethereum-Based Altcoin Flashing a Bearish Signal, Updates Outlook on Bitcoin
A crypto analyst thinks indications of a bearish signal are being displayed by one Ethereum (ETH)-based altcoin.
Ali Martinez tells his 30,800 followers on the social media platform X that the native asset of the decentralized oracle network Chainlink (LINK) could be primed for a brief correction.
Citing data from crypto analytics firm Santiment, Martinez points out that the last two times LINK’s 30-day market value to realized value (MVRV) passed 19%, the asset endured steep corrections. LINK’s MVRV recently hit 20%.
MVRV is the ratio of an asset’s current market cap divided by its realized capitalization – i.e. the value of all measured LINK at the price they were bought. MVRV 30-Day is a timebound metric that only analyzes that ratio among tokens that have moved at least once in the past 30 days. Traders use the metric to detect overbought or oversold conditions.
Martinez, however, believes that LINK will still hit higher highs after a brief correction. The 19th-ranked crypto asset by market cap is trading at $7.40 at time of writing.
The analyst also looks at Bitcoin (BTC), examining the top crypto asset’s Relative Strength Index (RSI), a widely used momentum indicator that aims to determine if an asset is overbought or oversold.
Says Martinez,
“Notice that each time the RSI on BTC 4-hour chart hits or surpasses 74.21, BTC tends to retrace. The RSI on the 4-hour chart recently hit 82.83!”
The RSI indicator scales from 0 to 100. A reading of below 30 is typically considered bullish while a reading of over 70 is typically considered to be a bearish sign.
BTC is trading at $27,362 at time of writing.
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