LINK: A bullish pattern on the charts, but is it without any caveats

Chainlink, the ‘de facto decentralized data provider’ for smart contracts, has expanded significantly over the last year. As a result, the total value secured (TVS) grew considerably in the previous 12 months. It crossed from $7B in early 2021 to around $58B in March 2022. This marked an increase of more than 800% as per crypto exchange Coinbase’s report posted this month. 

Ups and downs

The #23 most significant token at press time, Chainlink, was trading just shy of the $16 mark after recording a fresh 5% surge. That said, the said token has witnessed a long period of losses visible on Network Realized Profit/Loss in the recent past. As per the graph below, most LINK tokens moved at a loss since January 2022. 

Source: Santiment

While this might incorporate fear and uncertainty, a report from Santiment shed light on an exciting circulation pattern for this token that could signal a potential bullish scenario. The circulation followed a pattern consistent to sell at highs and buy at lows.

Source: Santiment

Supporting the cause

Firstly, the weighted sentiment dropped to the negative range somewhere in February. Here, it sat at its lowest level since October. Although, on 22 March, the metric did recover, as seen in the chart below. It stood at the 0.016 mark suggesting a sell-off was unlikely.

(Weighted social sentiment combined the positive/negative commentary and multiplied by the amount of social volume. Generally, prices top out when this gets too high, and bottoms when getting too low.)