Is Chainlink On Top? This metric may suggest

On-chain data shows that Chainlink’s social dominance has seen a huge jump following a sharp price increase, a possible sign that the top may be here.

Chainlink Social Dominance Grows to 3rd Largest in the Cryptocurrency Sector

According to data from on-chain analytics firm Emotion, LINK is currently the third most trending asset in the market. The indicator of interest here is “social dominance”, to understand which one first needs to look at another metric: social volume.

Social volume measures the total amount of social media text documents (i.e., text-based posts, threads, messages, etc.) that are mentioning a given asset (which, in the present case, is Chainlink).

This metric basically provides us with information about the degree of discussion a particular coin receives on major social media platforms such as Twitter, Reddit, Telegram and 4chan.

Now, the above social dominance is a metric that compares the social volume of a cryptocurrency to the top 100 assets by market cap in the sector.

Naturally, in the case of LINK, this indicator tells us how much of the discussion related to the top coins in the market is coming from discussions focused on Chainlink alone.

Here is a chart that shows the trend of Link social dominance over the past month:

Looks like the value of the metric has been quite high in recent days | Source: Santiment on Twitter

As shown in the above graph, Chainlink’s social dominance has registered a major increase after a rapid increase in the price of the cryptocurrency during the past few days.

At the peak of this latest bull run, the asset’s price climbed above the $8.4 mark, but the cryptocurrency has moved down slightly since then. Nonetheless, the price is still trading above $8.1 and the coin has an impressive 19% gain.

Historically, rallies like this have attracted a lot of attention to LINK, so it’s not particularly surprising that the cryptocurrency has taken up the share of discussions in this area.

However, the scale of this increase may be a worrying sign. Despite only being the 20th largest in terms of market cap, Chainlink is currently the third most talked about asset in the market.

Generally, when an asset is being talked about a lot, the price becomes more likely to move in the opposite direction to what this large crowd is expecting. Given that the latest buzz has happened right after the rally, it appears that the buzz is indeed a sign of enthusiasm in the market.

This amount of hype has often proved to be a bearish signal for Chainlink, as a top becomes more likely to form in such a market environment. If a similar pattern plays out, it could mean that the current social dominance increase is a sign that a local top is already in place for the cryptocurrency.

link price

At the time of writing, Chainlink is trading around $8.1, up 15% over the past week.

LINK has shot up during the past couple of days | Source: LINKUSD on TradingView

Featured Image from iStock.com, Chart from Tradingview.com, Sentiment.net