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- 87.5% of LINK supply is in profit, reducing selling pressure.
- Exchange reserves fell to multi-year lows, signaling supply scarcity.
- LINK price consolidates near $23 but remains poised for breakout.
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Chainlink (LINK) is setting up for a potentially explosive move as on-chain metrics point to tightening supply and sustained investor confidence. With nearly 90% of its circulating supply in profit and exchange reserves dropping to multi-year lows, conditions could favor a bullish breakout if demand accelerates.
LINK Supply Nears Peak Profitability
According to Glassnode data, 87.5% of LINK’s circulating supply is currently in profit, following its rally from under $15 in July to over $25 in late August. This surge in profitability means most holders are comfortably positioned, reducing the incentive to sell at present levels. Historically, such high profitability levels, combined with limited selling pressure, have created conditions for sharp upside moves if buying momentum increases.
Exchange Reserves at Multi-Year Lows
Fresh data from CryptoQuant highlights a steep decline in LINK’s exchange reserves, now down to 161.5 million tokens — the lowest in several years. This drop suggests fewer tokens are readily available for sale, a dynamic often associated with bullish setups. When exchange reserves fall while demand builds, the resulting supply squeeze can amplify price action significantly.
Market watchers note that this decline has persisted since mid-2023, even as LINK’s price steadily climbed. If demand strengthens, the restricted liquidity could accelerate LINK’s path to higher valuations.
Short-Term Momentum Cools, But Setup Remains Bullish
At the time of writing, LINK is consolidating around $23.58 after a strong August rally. Technical indicators reflect mixed signals: the token has slipped below its 9- and 21-day SMAs, while the RSI sits at a neutral 52.35. The MACD recently flipped bearish, indicating slowing momentum.
Despite these short-term headwinds, LINK’s resilience above the $23 mark underscores underlying strength. With exchange reserves near historic lows and the majority of supply in profit, the stage is set for a potential breakout if new demand enters the market.
Chainlink is at a critical juncture where constrained supply meets elevated profitability. If fresh demand emerges, LINK could see amplified price action in the weeks ahead, putting it firmly on traders’ watchlists.
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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
Also Read: Chainlink Brings U.S. GDP and Inflation Data On-Chain
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
