Why LINK’s Full Retrace Is a Setup, Not a Surrender

• LINK’s full retracement of its 2023–2025 rally places it back inside a demand zone that has held multiple times before.
  
• RSI near historical lows and stabilizing price structure suggest sellers are losing momentum at current support levels.
  
• Santiment’s MVRV data shows LINK at -5.1%, confirming slightly undervalued conditions that historically favor strategic buyers.

Analysts and traders have been keeping their eyes on Chainlink’s complete retracement of its gains from 2023 to 2025. 

The majority of these observers, though not the majority, will view it as a breakdown as opposed to a reset. On-chain metrics, technical price action, and price action in proximity to $8.72 are all being used to make the case for accumulating rather than panicking.

A Full Retrace Does Not Always Mean a Failed Trend

Chainlink returning to its pre-rally levels is not automatically a bearish development. In many market cycles, full retracements bring price back into zones where institutional and retail buyers previously accumulated. That is exactly where LINK sits right now.

Analyst Cryptorphic pointed this out directly, noting that $8.72 places the token inside a long-term demand zone that has already held multiple times. 

The 2023–2025 run being fully retraced puts LINK back into accumulation territory, not breakdown territory. That distinction matters when reading price action correctly.

A full retrace removes excess speculation built up during the prior rally. It shakes out weak hands and resets sentiment to a more neutral baseline. From that foundation, a healthier and more sustained trend rebuild becomes possible.

Technical Structure Is Stabilizing, Not Deteriorating

The RSI for LINK is sitting near historical lows, a condition that has preceded recoveries in past cycles. Price structure above support is also holding, which suggests that sellers are losing control of the move lower. These are early signals of trend exhaustion on the downside.

Cryptorphic outlined the likely sequence ahead: slow base formation, higher lows, trend rebuild, then momentum. This is not a prediction of an instant parabolic move. 

Rather, it reflects how major recovery phases typically develop after prolonged corrections.

The fact that LINK is stabilizing rather than accelerating lower carries weight. Each day that price holds above demand strengthens the base being formed. Over time, that base becomes the foundation for the next directional move higher.

Short-Term Resistance Levels Confirm Where Momentum Can Return

Trader Nehal identified $9 as the first key level LINK needs to reclaim. A clean break above that price would shift short-term sentiment and likely bring momentum buyers into the trade. From there, $9.56 sits at the top of the current defined channel as the next logical target.

Holding above $9 is the first confirmation that the base is transitioning into a recovery. Momentum traders typically wait for that kind of structural signal before committing capital. A sustained move above $9 changes the conversation from defense to offense.

Until that break happens, LINK remains in a consolidation phase. That is not a negative condition. Consolidation after a full retrace is where the next setup quietly forms.

On-Chain Data Supports the Case for Buying Into Weakness

Santiment’s February 21 MVRV analysis placed LINK at -5.1% on a 30-day basis. That reading puts the token in slightly undervalued territory, meaning average holders are currently sitting at a loss. Historically, this is the zone where strategic buyers build positions.

MVRV compares market value to realized value to identify when assets are mispriced. When average returns fall this far below zero, it signals that the market has already priced in the pain. Santiment described dollar-cost averaging during such periods as a historically sound strategy.

The broader MVRV data also showed Ethereum at -14.3% and Bitcoin at -6.9%, placing the current environment in a wider period of undervaluation. 

LINK sitting within that group adds weight to the setup case. Price refusing to go lower, while on-chain data flashes undervalued readings, is rarely a coincidence.

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