As a seasoned researcher with extensive experience in analyzing cryptocurrency market trends and on-chain data, I find the recent development in Chainlink (LINK) intriguing. The sharp decline in its exchange reserve, as indicated by a 1.6% decrease over the past month, has caught my attention.
Recent on-chain data indicates a decrease in Chainlink’s exchange reserves, which historically has preceded a significant price surge for the cryptocurrency.
Chainlink Exchange Supply Has Dropped By 1.6% In The Past Month
Based on information from the analytics company Santiment, Chainlink has experienced a notable reduction in the amount of its cryptocurrency held on exchanges as indicated by the “Supply on Excheses” metric. This metric monitors the proportion of the total circulating LINK supply that is currently being stored in the wallets of all centralized exchange platforms.
When the level of this indicator increases, it indicates that these platforms are currently taking in more funds than they’re disbursing. Given that investors often move their assets to trading platforms for selling purposes, this pattern could be a sign of potential bearishness for the asset.
Alternatively, when the indicator shows a decrease, it signals that more coins are being withdrawn from exchanges than deposited. Since holders often remove their coins for long-term storage, such a trend could be positive for the cryptocurrency’s value.
chart illustrating the development of Chainlink’s supply held on exchanges during the last year.
The graph shows that there’s been a significant decrease in the amount of Chainlink held on exchanges during the last month. Approximately 1.6% of the total circulating supply has been taken out by investors.
The decrease in this metric is quite substantial and implies a robust appetite for accrual among whales. The last occasion when we witnessed such a sizable reduction occurred at the beginning of the year. Following the 1.1% dip, the LINK price experienced a surge of approximately 10%.
In December, there was a pattern where coins worth 0.7% of the total supply were taken out, leading to a substantial increase of approximately 26% in the value of the coin. However, these occurrences had less significant outflows compared to recent events for LINK.
As a crypto investor, I’ve noticed from the chart that the last time a comparable percentage of supply was withdrawn from these platforms was between September 15th and October 14th. Following this significant withdrawal spree, Chainlink experienced an impressive surge of over 123% in price within the next four weeks.
With another decrease observed in the indicator, now at 21.4% down from 23%, there’s a likelihood that LINK may experience a positive impact similar to previous occurrences.
It’s yet uncertain whether any potential rally that may ensue would match the magnitude of that past occurrence, or if it will merely result in a minor uptick, as seen following the previous two outflow periods.
LINK Price
Currently, Chainlink is priced at approximately $13.9 on the market, representing a decrease of over 2% within the last 24 hours.
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2024-07-24 00:04