Catalyst for Chainlink’s Potential Upside
A recent analysis by crypto analytics firm Santiment suggests that Chainlink (LINK), a decentralized oracle network, may have more upside potential. Despite a sudden decline in LINK wallets, the rally of Chainlink could continue.
Santiment explains that when there is an abrupt decline in wallets, it usually indicates market capitulation caused by fear, uncertainty, and doubt (FUD). However, this can also be a sign of an impending price increase.
According to Santiment, the recent surge in Chainlink’s price is attributed to previously dormant wallets that have started moving large amounts of LINK back into circulation. Additionally, minor liquidations of wallets have occurred, which can contribute to further price rises.
As of now, LINK is trading at $18.76 with a nearly 12% increase in the past 24 hours.
Social Dominance Indicator Flips Bearish for Bitcoin
Santiment also highlights that the social dominance indicator, which tracks discussions about cryptocurrencies on social media platforms, may turn bearish for Bitcoin and bullish for altcoins this week.
Traditionally, a high ratio of Bitcoin discussions indicates fear. However, since the approval of Bitcoin ETFs by the SEC, the euphoria and optimism surrounding these ETFs have turned high BTC discussions into a greed indicator. Now that three weeks have passed since the approval, this indicator appears to be normalizing.
If altcoin discussions surpass Bitcoin discussions in terms of volume during the first week of February, it could push the BTC dominance ratio into an unhealthy bearish territory. This would mean that investors are once again favoring altcoins over Bitcoin.
Bitcoin is currently trading at $43,140.
Hot Take: Chainlink’s Potential and Bitcoin’s Social Dominance
Santiment’s analysis suggests that Chainlink may experience further upside potential despite the decline in LINK wallets. This decline, often associated with fear and uncertainty, can actually signal an impending price increase. Additionally, the movement of previously dormant LINK back into circulation and minor wallet liquidations contribute to the recent price jump of Chainlink.
On the other hand, Santiment predicts a shift in social dominance from Bitcoin to altcoins this week. While high BTC discussions have been driven by greed due to ETF expectations, the approval of these ETFs has normalized the indicator. If altcoin discussions surpass Bitcoin discussions in volume, it could indicate a bearish sentiment towards Bitcoin and a preference for altcoins.
Overall, these analyses highlight potential opportunities for both Chainlink and altcoins as they navigate the crypto market.
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