The BitMEX Perpetual Contract Funding Rate is an important way to gauge whether the crowd on one of crypto's top exchanges, is getting overly greedy or fearful.
The metric is defined on our Santiment Academy as a fee paid by one side of the perpetual contract to the other. When the funding rate is positive, Longs pay Shorts. When the funding rate is negative, Shorts pay Longs.
So in essence, as traders, we're looking for high funding rates (greed) to be indicative of a potential upcoming top, and low funding rates to indicate a potential bottom (fear).
March has been a rollercoaster for LINK Marines, as Chainlink's price fluctuated between $26 and $32 after its late February all-time high of ~$36.83. Let's see how some of its key metrics are looking:
Supply Help by Top 10 Exchange and Non-Exchange Addresses
The top 10 non-exchange LINK holders are holding around 2021-high levels, an encouraging sign. In the same respect, the top 10 exchange LINK holders the lowest amount since November, 2017. This lack of tokens available to sell off is also promising.
Weighted Social Sentiment
LINK is not having a major amount of discussion, and this is actually a good thing. Our studies prove that assets are more likely to rise when crowd discussion is dormant.
Daily Active Addresses & Deposits
Address activity has been declining, but at least deposits are also on the decline.
Whale Supply Distribution
The amount of whale holders with at least 10k $LINK continues to decline, a less than promising indication.
Bitcoin, Ethereum, Binance Coin, and Chainlink have all seen their share of expected growth of addresses interacting on their respective networks. But some have been much more active in contrast to others these past six months.
Below is a chart showing which projects are still showing solid activity through this extended bull run, while others are revealing signs of tapering off in regards to this impactful and predictive metric:
Clearly, Ethereum (in blue) has been showing the most long-term growth among these four juggernaut assets, combined with the least amount of fading.
Bitcoin had its peak right at the beginning of 2021, It hasn't shown a serious decline, but the gradual dropoff back to around 1.10M addresses a day is a concern.
Both Chainlink and Binance Coin have had isolated spikes, with LINK particularly throwing up a caution flag, reverting back to about a 2-month low.
Here's a more zoomed in perspective, for reference:
Our popular 'Weighted Social Sentiment' charts are finally back! They're once again available here for our PRO members to explore how positive vs. negative commentary is looking in real-time for 1,000+ assets.
Weighted social sentiment combines the positive/negative commentary, and multiply by the amount of social volume. Generally prices top out when this gets too high, and bottoms when getting too low.
BTC's at its most negative sentiment in 5 months, in spite of it pushing toward its recent all-time high.
Ethereum isn't quite at an extremely low negative level like Bitcoin, but it's seeing some similar negative commentary currently.
XRP has been just slightly negative for upwards of a month now.
Chainlink has quietly become more negative, and is sitting at its lowest level since October.
Polkadot very recently took a bit nosedive after what appears to be a double top.
Cardano is finally neutral again after its most euphoric social sentiment in over a year.
Network Realized Profit or Loss (NPL) calculates the overall ROI across all daily transactions for a crypto asset. Generally, spikes are what we look to avoid, as it implies increased chances of local tops and short-term price normalization.
So are we seeing major spikes to be worried about? Here's how NPL currently looks for some of crypto's biggest names:
Bitcoin hit its lowest NPL of the month yesterday, and is well below its 30d and 200d trendlines. A great sign that an imminent local top isn't approaching.
ETH is more neutral than BTC, sitting right between its 30d and 200d trendlines.
Chainlink is at a low for the month in NPL, and this coincides with a major address activity spike. Could be good here.
LTC's NPL is below the 30d and 200d trendlines and has been sitting encouragingly low for about 2 straight weeks now.