Chainlink outperformed the rest of the sector with a sharp rally over the past week. Here’s what’s driving this, according to on-chain data.
Chainlink Price Has Been Rising Rapidly Recently
The past few weeks have been a great time for LINK investors, as the stock has nearly tripled in value compared to early November. Earlier this week, the coin saw a slight pullback, but a sharp bullish momentum has already started in the past few days.
Below is a chart showing how LINK’s performance has been over the past few months:
The price of the coin seems to have rapidly been moving up recently | Source: LINKUSDT on TradingView
From the graph, it can be seen that after jumping more than 47% from the bottom at the beginning of the week, Chainlink managed to break above the $28 mark. The asset is now sitting on a weekly gain of over 22%, making it the best performer among the top cryptocurrencies by market average.
Speaking of market cap, LINK is now the 12th largest in the sector according to this metric, sitting just above Shiba Inu (SHIB).
Looks like the market cap of the coin is $17.7 billion at the moment | Source: CoinMarketCap
As seen in the table above, the next asset to hit Chainlink is Avalanche (AVAX). Its market cap is still $3.5 billion more than LINK’s, so it could be a while before something happens, assuming the bullish momentum doesn’t end.
As for what has been fueling the rise of cryptocurrency, perhaps on-chain data can provide a hint.
LINK Sharks & Whales Have Been Busy With Their Pooling
In a new post on X, the on-chain analytics company Santiment discussed how behavior differs between small and large companies in the LINK network recently. The index of relevance here is “Supply Distribution,” which tracks the total amount of Chainlink that members of a given wallet group currently hold.
In the context of the current article, the two address ranges of interest are 0 to 100,000 coins and 100,000+ coins. According to the current exchange rate, the border of 100,000 between the two groups converts to about $ 2.8 million.
Addresses holding more than this amount are considered significant investors in the market, known as sharks and whales. Therefore, the group’s Supply Distribution tracks the behavior of large investors.
Now, here’s a chart shared by a analytics company that shows how this index compares between sharks and whales and regular investors:
The metric appears to have gone opposite ways for the two cohorts | Source: Santiment on X
As shown in the graph above, small Chainlink investors have been selling over the past few months, possibly because they didn’t think LINK would turn itself around.
However, sharks and whales sensed an opportunity and bought a total of 5.69 million from this group. As Santiment explains,
Throughout the history of crypto, large wallets hoarding a coin from impatient or panicked traders is often a recipe for a market rally.
Featured image from Dall-E, Santiment.net, chart from TradingView.com