"Chainlink's [LINK] Bearish Shift: Key Metrics Signal Potential Downturn"

Chainlink's [LINK] market sentiment appears to be shifting towards bearish territory, as key metrics suggest a potential downturn. Despite a strong pump on Sunday, March 2, following the announcement of a U.S. strategic crypto reserve, LINK's price performance has shown a continued downtrend on the daily chart. On-chain metrics also indicate that the token may not match its previous run's performance.

The recent market decline, triggered by U.S. President Biden's confirmation of tariffs on Mexico and Canada, as well as additional tariffs on Chinese imports, has affected the entire crypto market. LINK, like Bitcoin [BTC], was forced to retrace its weekend pump. However, longer-term metrics may offer more insight into the future prospects for Chainlink holders.

Falling LINK transfers on-chain, alongside the price decline, have affected the Network Value to Transactions (NVT) metric. A higher nvt implies an overvalued asset, and in September 2024, the NVT hit its highest point since January 2020 due to low on-chain volume. Although the volume picked up during the November-December price rally, the NVT has begun to trend higher once again, suggesting a potential overvaluation of LINK.

The MVRV ratio, which provides insight into market sentiment and the fair price of Chainlink, was 1.29 at press time. While this indicates that holders are, on average, at a decent profit, the MVRV is far from the levels reached in 2020 and 2021. The altcoin market has diluted significantly in the last four years, and it is possible that LINK's MVRV will not reach the profit levels of the previous bull run.

The Net Unrealized Profit/Loss (NUPL) ratio, which measures the ratio of relative unrealized profits to relative unrealized losses, has been sliding in recent weeks. The current value of 0.18 is well below the December 2024 level of 0.62, indicating a shift towards fearful sentiment among investors. The metric has struggled to clear the 0.55 level over the past six months, highlighting the difference in LINK's performance between cycles.

As the market sentiment for LINK appears to be turning bearish, investors may want to consider taking profits more aggressively if the downtr