Chainlink has observed some dramatic growth recently, but can the cryptocurrency maintain this bullish momentum?
Chainlink has seen significant returns over the past week
While the rest of the digital asset space has struggled recently, Chainlink stands out as a rapidly rising token. The price has also continued its recent trend over the past day, with prices currently floating above $7.2.
The value of the asset seems to have been climbing in the last few days | Source: LINKUSD on TradingView
Over the past week, all of the top 20 assets by market capitalization, except LINK, posted negative returns. As a result, LINK’s strong growth makes it the best-performing company in the sector by far.
Despite strong performance over the past month, Chainlink has yet to return to pre-crash levels in August. Still, it’s not that far off now, which means if this uptrend can continue in the coming days, the cryptocurrency should complete its recovery.
The impact of different indicators on LINK surge
Now, as to whether the run can continue, perhaps data from on-chain analytics firm Santiment can provide some clues. First, the rally appears to be supported by a significant amount of address activity, as shown in the chart below:
Looks like the indicator's value has been quite high recently | Source: Santiment on X
As shown in the chart above, the number of daily active addresses on Chainlink recently hit its highest level since July. The “active address” here refers to the unique address that participates in certain transaction activities on the blockchain.
The number of active addresses can be seen as a proxy for the number of users trading the asset, so a high value for this metric means that the coin is experiencing a lot of activity.
Active addresses remaining high during a rally is a positive sign as it means traders are showing interest in the move higher. This is different from the rally seen earlier this month, which was not supported by such activity and therefore ran out of fuel soon after.
Santiment also pointed out an interesting pattern that LINK has observed recently, whereby price increases are often accompanied by increases in the token’s FX reserves.
The value of the metric had recently spiked | Source: Santiment on X
This pattern has been repeated in the recent surge, as supply on exchanges hit new highs for the year even before the rally began. This trend is different from what usually happens with other cryptocurrencies, where coin inflows into exchanges are usually a bearish sign.
Despite Chainlink’s recent surge, there appears to be only a slight increase in social media discussion around the asset, as shown by the Social Volume data.
LINK's social volume hasn't gone up too much | Source: Santiment on X
Historically, too much social media hype has been detrimental to rallies, so Chainlink seeing only relatively healthy growth in its social volume could be a promising sign for the sustainability of its surge.
Featured images from Shutterstock.com, charts from TradingView.com, Santiment.net
