On-chain data shows that Chainlink has continued to see negative exchange netflows recently, a potentially bullish sign for LINK value.
Chainlink Exchange Netflows Have Been Negative for Almost a Month
In a new post on X, market intelligence platform IntoTheBlock discussed the latest trends in Chainlink exchange flow. “Trading netflow” here means an indicator that tracks the net amount of LINK flowing into or out of wallets related to the central exchange.
If the value of this metric is positive, it means that these platforms are getting the full number of tokens. As one of the main reasons why investors send their coins to trading is for purposes related to selling, this type of trend can carry bearish effects on the price of the asset.
On the other hand, the negative indicator suggests that the owners are withdrawing the full amount of cryptocurrency from the exchange. Owners usually take their coins to protect themselves whenever they plan to hold long-term, so this kind of trend is bullish on LINK.
Now, here is a chart showing the trend in Chainlink’s exchange flow over the past month:
The value of the metric appears to have been negative for a while now | Source: IntoTheBlock on X
As seen in the graph above, Chainlink exchange netflow has been below zero for the past few weeks, which means that investors have been withdrawing from these platforms.
“This trend often points to hoarding, as owners move assets to cold storage or private wallets, reducing pressure to sell quickly,” notes IntoTheBlock. Now it remains to be seen whether this overall exit will ultimately benefit LINK or not.
The negative netflow exchange is not the only strong bearish sign that cryptocurrency has seen recently, as on-chain analytics company Santiment has pointed out in X’s post.
The signal in question is the Weighted Sentiment metric, which tells us about the sentiment related to a particular asset that is currently on the major social networks.
This index uses the company’s machine learning model to distinguish between negative and positive posts, and calculate the overall picture. It then measures this value against the total number of posts on social media that day (called Social Volume).
Below is a table showing changes in this metric at different times for various assets in the cryptocurrency sector.
The changes in the sentiment on social media for different assets in the sector | Source: Santiment on X
From the table, it is clear that Chainlink’s recent daily change in Weighted Sentiment has been a sharp change of -372%, which means that investors are feeling FUD behind the recent price action.
Historically, cryptocurrencies tend to move against the expectations of the crowd, so whenever traders become too bearish, a bullish reversal is likely. Therefore, it is possible that recent sharp negative sentiments may help the price of LINK.
LINK Value
At the time of writing, Chainlink is floating around $11.4, up 4% over the past week.
Looks like the price of the coin has plunged over the past couple of days | Source: LINKUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com
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