Ethereum (ETH) and ChainLink (LINK) have become some of the biggest underperformers in 2024, showing the lowest returns both monthly and over the past year. Despite high expectations and strong utility, both ETH and LINK have turned out to be among the worst-performing assets.
Over the past month, Ethereum and ChainLink have experienced severe losses, dropping to the bottom of the performance charts. Although these tokens were highly anticipated due to their adoption and utility, market volatility and other challenges have turned them into poor investment choices this year.
According to Santiment data, ETH and LINK displayed the most significant signs of distress, indicating that potential rebounds might be possible. However, neither ETH nor LINK has managed to achieve the major rallies that were frequently predicted.
On a particularly turbulent day, both ETH and LINK lost more than 20% of their value overnight. Even during bullish periods, these tokens have shown signs of being underbought.
LINK Returns to Pre-Rally Levels
LINK has recently fallen to $9.03, although it hasn’t completely wiped out the gains made over the past 12 months. It remains above its bear market lows of $5.87, but the current volatility could continue to exert pressure on the price. LINK has now dropped to its two-year range, similar to other altcoins that have erased their 2024 gains.
Another pullback towards the $7-8 range is anticipated for LINK. The token has previously exhibited short rallies followed by significant declines.
LINK plays a crucial role in securing value on the Aave protocol, but it struggled to surpass the $18 mark. Expectations for 2024 included a rise to $35 and setting new records, but LINK now holds over $18 billion in locked value and has seen a 14% decline in the past day due to overall market conditions.
LINK’s supply could face inflation due to unscheduled token unlocks. Over 44% of the total supply is held in a conditional team wallet, which is reserved for treasury reserves without a set release schedule.
ETH Experiences Spot Buying at Low Levels
ETH entered last week with relatively low open interest compared to Bitcoin (BTC). However, it is a heavily traded token, and the past 24 hours saw its value decrease more than even some volatile meme tokens.
Smart money began selling ETH before the deeper market decline. As ETH fell to around $2,200, hacker wallets took advantage of the situation, with the Nomad bridge exploiter acquiring 16,892 ETH and subsequently making the tokens untraceable via Tornado Cash.
Spot buying has resumed from smart money wallets, using stablecoins from lending protocols that are still operational despite the market downturn.
ETH prices are now largely influenced by spot buyers after most derivative positions were liquidated. ETH open interest has liquidated over $4 billion since the launch of ETF trading. Additionally, Grayscale has reduced its ETH holdings from 2.5 million to 2.39 million tokens. Grayscale remains the only ETF actively selling its position, while other funds have reported inflows even over the weekend.
ETH has fallen faster than BTC, with its market dominance shrinking to 15.1% from its usual 17%. The price of ETH has continued to decline below $2,200, driven by negative news from the stock market. The recent slide in both stock and crypto markets was triggered by the Bank of Japan’s 0.25-point interest rate hike, which led to a global market correction.
The crypto market saw over $1 billion in liquidations in the past 24 hours, marking the largest liquidation event since the April market correction, primarily affecting long positions.
