Chainlink’s reserves on exchanges continue to decline, raising interest among investors and experts. This article examines the current trends and their market implications.
Declining Exchange Reserves
According to CryptoQuant, the current supply of the token on exchanges stands at 161.8 million, part of a multi-year trend that began in mid-2023 when prices were around $6 to $7.
Decreasing supply available for sale reduces market pressure. Decreasing token reserves on exchanges usually precede bull trends, as limited supply can lead to price increases.
Investor Profits Reach Record Levels
Data from Glassnode indicates that nearly 90% of LINK holders are currently in profit, a phenomenon also observed during the last rally in July.
However, such a high percentage of holders sitting on unrealized profits may pose risks to the market. If investors decide to realize some gains, it could lead to price declines. Nonetheless, LINK has maintained a healthy profit-taking margin for its holders so far.
Growing Interest in the Token
Open Interest in derivatives markets has also skyrocketed over the past year.
As of September 1, 2024, the open interest for the token was around $115 million, which surged to over $1.2 billion. This reflects growing interest from both institutional and retail investors towards the Chainlink project and its token. Currently, LINK is trading at around $23, a negligible dip considering the recent 48% increase over the past month and a 118% increase for the year.
The current decline in Chainlink's token reserves, high percentage of profitable investors, and growing interest in the project create an interesting situation in the market. It is essential to monitor future developments to assess upcoming price trends.
