- 90% of Chainlink holders remain profitable, reducing pressure to sell.
- Exchange reserves drop to multi-year low, signaling limited market supply.
- LINK consolidates near $23.5, awaiting fresh demand for potential breakout.
Chainlink’s LINK seems to be gearing for a significant move as supply conditions tighten across the market. Nearly 90% of circulating LINK now sits in profit, reducing the urge for holders to sell. At the same time, exchange reserves have dropped to multi-year lows, signaling limited liquidity. This combination creates a setup where fresh demand could ignite sharp upside momentum.
Profitability Climbs as Supply Tightens
At press time, 87.5% of Chainlink’s circulating supply was in profit, Glassnode data showed. Profitability has surged since July, when LINK traded under $15. Prices climbed above $25 in August, rewarding long-term holders with solid gains. Most wallets now reflect profits, giving owners little incentive to sell at current prices. This profit cushion reduces short-term sell pressure, strengthening conditions for another rally.
Meanwhile, exchange reserves continue falling. CryptoQuant data revealed only 161.5 million LINK left on exchanges, a multi-year low. The decline in reserves has persisted since mid-2023, even as prices advanced toward $24.Lower reserves mean fewer tokens are available for immediate trading. With supply thinning, any spike in demand could magnify price moves. Markets often respond strongly to such imbalances, and LINK seems positioned for that scenario.
Momentum Pauses but Setup Remains Strong
Despite bullish fundamentals, LINK has cooled after a strong rally in early August. At press time, the token traded near $23.58, consolidating gains. Technical indicators showed mixed signals. The daily chart revealed LINK slipping below the 9-day and 21-day moving averages. Short-term momentum weakened, with the RSI near 52. The MACD crossed bearish, pointing to fading strength.
Sellers gained ground, but not enough to force a deeper correction. LINK is holding above $23 despite cooling momentum, showing resilience. That stability highlights underlying strength and investor confidence. While traders pause, conditions behind the scenes keep tightening. Supply remains at record lows, and holders stay in profit. These factors often precede stronger rallies, provided demand returns.
Limited liquidity on exchanges can amplify gains when buyers step back in. Chainlink has shown such patterns before, and the current setup looks similar. Looking forward, sentiment may hinge on broader market conditions. A shift in risk appetite could draw attention back to altcoins. If crypto markets strengthen, LINK could benefit disproportionately from reduced supply pressure.
Chainlink faces a unique mix of strong fundamentals and cautious short-term momentum. Nearly 90% of circulating supply sits in profit, discouraging selling. Exchange reserves have dropped to multi-year lows, limiting liquidity. Technicals show cooling momentum, but support remains firm above $23.
