While most assets started the month of January on a great note, February wasn’t as good. Most cryptocurrencies were seen struggling in terms of price. Bitcoin’s downfall below the $100,000 level came as a major shocker. Amidst this, Chainlink (LINK) witnessed a brutal drop of 40% throughout the past month. The altcoin failed to stay put as it dropped from a high of $27.03 all the way to a low of $16.35.
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Revisiting Reasons Behind Chainlink’s Downfall
Prominent analyst Ali Martinez took to X and revealed an array of reasons behind Chainlink’s massive plummet. Firstly, Martinez addressed that the current price correlation indicates a slowdown in Chainlink activity as it coincides with a network contraction. The network has reportedly been contracting since November 30.
Alongside this slowdown, LINK’s price was also impacted by the MVRV Ration. According to the analsyt, the MVRV Ratio, which measures trader profitability, also shows this decline. The average loss for individuals who purchased LINK throughout the last 30 days is currently at a negative 16%. Historically, selling fatigue points have been identified at this level.
In addition to this, the overall market sentiment, which is dull at the moment, could have impacted the price of Chainlink.
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How Is The Asset Faring Right Now?
At the time of writing, Chainlink was trading at $18.09. This comes after a weekly drop of 3.15%. As the asset struggles to reclaim $20, the community is waiting for a slight respite.
Data from CoinCodex restored hope to the LINK market. While the asset is expected to struggle below $20 throughout this month, the coming month could be different for LINK. According to the firm, Chainlink will rise to a high of $21.34 following a 17.77% rise in March 2025.
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