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Chainlink Exchange Supply Plummets, Is This Bullish?

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On-chain data shows the Chainlink exchange supply has observed a plummet, something that could turn out to be bullish for the asset’s price.

Chainlink Supply On Exchanges Has Registered A Drawdown Recently

According to data from the on-chain analytics firm Santiment, the LINK supply on exchanges could be forming a bullish divergence right now. The “supply on exchanges” here refers to the percentage of the total Chainlink circulating supply that’s currently being stored in the wallets of all centralized exchanges.

When the value of this metric rises, it means that the investors are depositing a net amount of their coins to these platforms currently. As one of the main reasons why they may transfer their coins to exchanges is for selling-related purposes, this kind of trend can have bearish effects on the cryptocurrency.

On the contrary, the indicator’s value going down (that is, withdrawals taking place) could prove to be bullish for the price, as it can be a sign that the holders are accumulating.

Now, here is a chart that shows the trend in the Chainlink supply on exchanges over the past few years:

The value of the metric seems to have observed some decline in recent days | Source: Santiment on X

From the graph, it’s visible that the Chainlink supply on exchanges has registered a drop recently, meaning that a net number of coins has left these central entities.

In the chart, Santiment has also highlighted the pattern that the cryptocurrency’s price had followed when a similar trend in the supply on exchanges had formed in the last few years.

It would appear that whenever the supply on exchanges has declined into the green zone alongside decreases in the price, Chainlink has observed some uptrend soon after.

Since at the current value of about 15.5%, the indicator is inside this green territory, it’s possible

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Author: Hououin Kyouma

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