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As the cryptocurrency market faces a slight recovery after celebrating the New Year and weekend, some tokens like Chainlink are showing a strong recovery with 31% growth in the last five days.
The asset becomes profitable again
After the 50% correction started back in November, the majority of the Chainlink network was holding the asset at a loss. After a short-term pump of the token, the Realized Profit/Loss ratio on the network flipped, with the majority of traders on the network holding LINK at a profit.
?? #Chainlink's rise from $19.15 at the end of 2021, to $25.17 just 4 days later (+31%) has raised some eyebrows. $LINK's network profit/loss has spiked, indicating traders are back in profit. A drop below 0 would indicate another great buy opportunity. https://t.co/1R5RSRD3ud pic.twitter.com/wzmG6YWHOz
— Santiment (@santimentfeed) January 5, 2022
The same data is being confirmed by an indicator from another on-chain data provide, IntoTheBlock, with 57% of Chainlink holders profiting from their positions. At press time, only 32% of investors holding LINK were at a loss, and 12% are breaking even.
The network's Profit and Loss ratio is sometimes used by traders to determine the current conditions of the market similar to the RSI indicator. Whenever a large portion is profiting, traders tend to avoid entering a token or a coin. Whenever the majority decides to take profit, the market might be hit with unexpected volatility.
Link's market performance
According to data from TradingView, Chainlink has entered another growth stage by gaining 31% in the last five days. Previously, Link lost approximately 50% of its value and bottomed out in the middle of December.
In the long-term perspective, Chainlink is moving in the rangebound formed back in September 2021. During the period of movement within the range, Link has reached the $35 zone two times and then retraced for an average of 45% twice.
Gamza Khanzadaev
Yuri Molchan
