Chainlink Traders Capitulate After 10% Plunge: Bottom Here?

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Chainlink

On-chain data shows that Chainlink investors have been realizing significant losses recently, a sign that the price plunge has put fear into their minds.

Chainlink FUD Could Lead Towards Bottom Formation

According to data from the on-chain analytics firm Santiment, LINK investors have just shown their largest capitulation event of the year. The indicator of relevance here is the “Network Realized Profit/Loss,” which keeps track of the net amount of profit or loss that Chainlink traders are realizing right now.

The metric works by going through the blockchain history of each coin sold to see what price it was moved at before this. If this previous price for any coin was less than the spot price it’s being transferred at now, then the coin’s sale is realizing some profit.

Similarly, transactions of coins of the opposite type would lead to loss realization instead. The indicator adds up these profits and losses for the entire network and then calculates their difference to find the net situation.

When the value of the Network Realized Profit/Loss is positive, it means the investors as a whole are realizing profits. On the other hand, the negative metric suggests that loss-taking is the dominant form of selling in the market.

Now, here is a chart that shows the trend in the Chainlink Network Realized Profit/Loss over the past few months:

Chainlink Network Realized Profit/Loss
Looks like the value of the metric has been quite negative in recent days | Source: Santiment on X

As is visible in the above graph, the Chainlink Network Realized Profit/Loss has seen a negative spike recently, suggesting that LINK investors have realized some large losses.

This significant loss-taking spree from the LINK traders has come as the cryptocurrency’s price has gone through a significant drawdown over the past few weeks. The coin is down almost 10% in the last seven days alone.

Given this timing, it would appear that these investors have been scared by the bearish price action so much that they have decided to exit the market at a loss.

In the same chart, the analytics firm has also attached the data for another metric, the Age Consumed, which keeps track of whether dormant coins are moving.

It would seem like this indicator also spiked alongside the loss-taking from the investors, implying that even some holders previously sitting tight have been shaken out by the price plunge.

This FUD in the market can benefit Chainlink, as historically, the asset has been more likely to bottom out when fear is ripe among the investors. As Santiment highlighted in the graph, a red spike in the indicator also proved bullish for LINK in April.

LINK Price

Chainlink is trading around $12.8 when writing, down around 3% over the last 24 hours.

Chainlink Price Chart
The price of the coin appears to have been moving down over the last few weeks | Source: LINKUSD on TradingView

Featured image from Dall-E, Santiment.net, chart from TradingView.com

Keshav Verma

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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