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Key takeaways
What does the recent withdrawal of 63 million LINK tokens from exchanges suggest?
This indicates accumulation and growing demand, despite bearish price action.
Why is Chainlink’s recovery uncertain despite positive sentiment and partnerships?
Profit taking during minor price rebounds signals low bullish conviction and a potential continuation of the downtrend.
More than 63 million Chainlink (LINK) tokens have been removed from exchanges over the past month, crypto analyst Ali Martinez revealed in a post on X (formerly Twitter).
The movement of tokens off exchanges generally indicates accumulation and demand.
Social volume was high and positive weighted sentiment showed engagement was bullish overall. The addition of 78K LINK to the growing Chainlink pool was another encouraging factor.
However, price action has remained bearish in recent weeks. Since the beginning of October, LINK has lost 30.1% in value, going from $22.58 to $15.77. A recent price rebound translated into profit-taking pressure, which was a worrying sign for the bulls.
Chainlink faces a difficult path to recovery
Source: Glassnode
By November 10, LINK prices had reached a high of $16.65. This rebound began a few days earlier and the short-term bullish momentum continued through the weekend.
Interestingly, LINK net transfer volume to/from exchanges has been negative for most of the last month. During the price rebound from $14.4 to $16.65, a 15% increase, LINK net transfer volume moved from negative to neutral territory.
In other words, transfers from exchanges dominated until a week ago, but the recent price rebound has triggered selling by holders.
This change is reflected in both the chart and the volume of Chainlink exchange inflows.
Source: Glassnode
The Coin Days Destroyed metric also peaked on November 10, another sign of on-chain selling during the price rebound. Together, this showed profit-taking activity from holders.
Despite positive developments, such as the flow of partnerships and collaborations with established financial entities, the desire of holders to make profits with a meager rebound was telling.
This shows that the current downtrend in price could continue, especially if the $15.45 support level is lost to sellers.
