On-chain data shows that Chainlink has continued to observe negative exchange flows recently, a potentially bullish sign for LINK’s value.
Chainlink exchange net flows have been negative for about a month
In new mail On X, market intelligence platform IntoTheBlock discussed the latest trend in Chainlink exchange network flow. “Exchange Network Flow” here refers to an indicator that tracks the net amount of LINK entering or exiting wallets linked to centralized exchanges.
When the value of this metric is positive, it means that these platforms receive a net number of tokens. Since one of the main reasons investors send their coins to exchanges is for selling purposes, this type of trend can carry bearish implications for the price of the asset.
On the other hand, the indicator being negative indicates that holders are taking a net amount of cryptocurrency from exchanges. Holders typically take their coins into self-custody when they plan to hold them long-term, so this type of trend could be bullish for LINK.
Now, here is a chart showing the trend in Chainlink exchange net flow over the past month:
The value of the metric appears to have been negative for a while now | Source: IntoTheBlock on X
As can be seen in the chart above, Chainlink exchange net flow has been below zero over the past few weeks, meaning that investors have been constantly making withdrawals from these platforms.
“This trend often indicates accumulation, as owners move assets into cold storage or private wallets, reducing immediate selling pressure,” IntoTheBlock notes. It now remains to be seen whether or not LINK will benefit from these net outflows.
Negative net exchange inflow isn’t the only potential bullish sign the cryptocurrency has seen recently, as on-chain analytics firm Santiment noted in X mail.
The signal in question relates to the weighted sentiment metric, which tells us about the sentiment regarding a particular asset currently present on major social media platforms.
This indicator uses the analytics company’s machine learning model to separate negative and positive posts, and calculate the net picture. It then compares this value with the total number of posts on social media that day (called social volume).
Below is a table showing changes in this metric over different time frames 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 was a sharp shift of -372%, which means that investors are feeling FUD after the recent bearish price movement.
Historically, cryptocurrencies have tended to move against the public’s expectations, so when traders become too bearish, a bullish reversal can become possible. Therefore, it is possible that the recent sharp negative sentiment will help LINK’s price.
Link price
At the time of writing, Chainlink’s price is trading 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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