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Key Takeaways
What does the recent withdrawal of 63 million LINK tokens from exchanges indicate?
This indicates increased accumulation and demand despite weak price action.
Why is Chainlink’s recovery uncertain despite positive sentiment and partnerships?
Taking profits during a minor price bounce is a sign of weak bullish confidence and that the downtrend may continue.
Crypto analyst Ali Martinez said in a post on X (formerly Twitter) that more than 63 million Chainlink (LINK) tokens have been withdrawn from exchanges over the past month.
Movement of tokens out of exchanges usually indicates accumulation and demand.
Social volume was high and positive-weighted sentiment indicated that engagement was generally optimistic. The addition of 78K LINK to the growing Chainlink Reserve was another encouraging factor.
However, price action has remained weak in recent weeks. Since early October, LINK’s value has fallen 30.1%, from $22.58 to $15.77. The recent price rebound has created profit-taking pressure, which is a worrying sign for bulls.
Chainlink faces a tough road to recovery.
Source: Glassnode
On November 10, LINK price rose to $16.65. This rebound began a few days ago and maintained short-term bullish momentum over the weekend.
Interestingly, LINK net transfer volume to and from exchanges has been negative for most of the past month. LINK net transfer volume moved from negative to neutral territory while the price fluctuated 15% from $14.4 to $16.65.
In other words, transfers on exchanges were dominant until a week ago, but the recent price rebound has triggered selling by holders.
These changes are reflected both on the charts and in Chainlink’s exchange inflows.
Source: Glassnode
The Coin Days Destroyed indicator also peaked on November 10th, another sign of on-chain selling during the price rebound. Together, we showed the profit-generating activities of the holders.
Despite positive developments such as the flow of partnerships and collaborations with established financial institutions, the negligible rebound speaks to holders’ willingness to book profits.
This showed that the current bearish price trend could continue, especially if the $15.45 support level is lost to sellers.