Link Investors Could Still See Some Rough Days Despite Much to Rejoice About
Recently, LINK parent firm Chainlink revealed its partnership with Arbitrum to enable layer-2 decentralized apps, popularly known as dApps grow in the decentralized finance space. On its Twitter handle, Chainlink announced that Arbitrum developers could now be able to build fully decentralized automated applications following the partnership.
The collaboration would see Arbitrum utilize Chainlink’s automation to scale the dApps built on its network. On top of this, Chainlink has continued to partner with other Web3 firms. The collaborations and the increasing number of products on the Chainlink network have kept developers busy.
Data from Token Terminal indicates continued growth in daily active developers on the Chainlink network since its launch. The increase could be associated with developers actively contributing to Chainlink’s GitHub.
Chainlink Records Decreased User Activity and Price
However, despite the numerous partnerships and increased developers’ activity, the Chainlink network continues to underperform in terms of user activity and price. In addition, data collected by Santiment shows a decreasing percentage of LINK held by top addresses, thus signaling a decline in the number of those addresses.
Additionally, Santiment observed a decrease in daily active addresses on the Chainlink network, indicating that user activity on the chain had also declined. Also, LINK velocity saw a decline, suggesting that the frequency at which users exchanged LINK between their addresses had gone down.
Not only have these factors led to the decline in LINK’s prices, but also they have impacted the Market Value to Realized Value ratio. Data from Santiment shows that this ratio has constantly decreased in the past three weeks. Therefore, if all LINK holders choose to sell their position today, they would likely do so at a massive loss.
LINK Holders Opt to Sell off Their Holdings at a Loss
Nevertheless, some LINK holders are opting to sell. There is a spike in the volume of transactions in a loss. The increase in these transactions and the decreasing Market Value to Realized Value ratio imply that more LINK holders are willing to sell off their holdings.
It appears that Chainlink has lost the trust of investors. In addition, the recent slow growth of the network indicates that it has yet to attract new investors, as only a few new addresses are holding LINK for the first time. Data from CoinMarketCap shows LINK trading at $5.89 at the time of writing.
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