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With Bitcoin nearing the $52k price range earlier on Sunday, many of the market’s altcoins were overwhelmed by mounting sell pressure, resulting in significant losses across the altcoin market. Because of the high correlation that altcoins have with the cryptocurrency market leader Bitcoin, such an outcome has always been expected.
What was interesting, though, was how some coins responded to the price reversal and were able to recover most of the losses they suffered the day before.
Chainlink is a prime example; the 11th largest cryptocurrency not only reduced its losses yesterday due to its high support level of about $38, but it has also been able to record remarkable gains in a short period of time. LINK’s price has risen by more than 15% in the last 24 hours. Similar market conditions are present in the Litecoin market, allowing the price to rise by 5% in the last 24 hours.
In the case of Connection, good dynamics seem to be supporting the market, decreasing the likelihood of a price reversal in the near future. However, according to Cryptowatch results, LINK still has a positive association with BTC of.79, making BTC’s movement important for LINK’s own price ambitions.
Interestingly, LINK’s association with BTC remains smaller than that of many other top-10 altcoins, such as XRP and ETH, which may explain why LINK has been able to restore its losses in a shorter period of time.
However, this is not the only explanation why LINK has been able to do reasonably well in difficult market conditions. The coin has also shown solid fundamentals, which may be a crucial factor for the demand to maintain the price.
After the beginning of the month, LINK has seen a gradual increase in the number of new addresses added to the network. According to Glassnode, LINK’s new addresses have just hit a 1-month peak of 258.655, contributing to the coin’s steady growth and operation on the network – a positive indicator for the coin in the long term.
There have been notable advances in the near term. While the overall altcoin market experienced elevated bearishness and seller domination, with several coins joining exchanges, the opposite pattern occurred in the case of Connection.
According to market data, there has been a migration from exchange wallets to what could presumably be cold storage – a key indicator of strong hodler support for the coin and its price. The number of exchange withdrawals (7d MA) reached a 1-month high of 55.637, while the amount of exchange outflows reached a 1-month high of 89,098.793 Connection.
On the other hand, another pattern was evident in the LTC industry. Though the coin has continued to limit its losses and stay inside the $270 price band, Glassnode’s data suggests that the CDD metric has reached a two-year peak. A high value in terms of Coin Days Destroyed indicates that older coins are now being spent by long-term investors to realise profits and is key to understanding the investor sentiment that can have both long-term and short-term impacts on the market.
Although LINK and LTC are not inherently the rule in terms of how the altcoin industry responds to a BTC-induced price reversal, the past few days have shown how much of the market’s altcoins have held their own trajectory. Though it might be too premature to call this a ‘alt rally,’ the past day has shown that some altcoins will recover faster than predicted.