Yesterday, August 5, LINK, the native coin of Chainlink, a decentralized oracle provider, plummeted to a six-month low. Trading at around $8, LINK fell 64% from March highs, breaking a bullish flag, indicating weakness. The correction was widespread, with major altcoins like Solana and Cardano also posting heavy losses.
LINK holders accumulate and exchange outflows skyrocket
However, as markets bled and fell below key support levels, savvy investors saw this as an opportunity to accumulate. According to IntoTheBlock x.com/intotheblock/status/1820782745494212997″ target=”_blank” rel=”nofollow”>data Yesterday, August 6th, there was a marked increase in the number of active LINK addresses, reaching levels not seen in approximately three months.
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The rise in active addresses coincided with a surge in outflows from exchanges. This development suggests that users were more interested in accumulating LINK than selling, despite the asset price decline.
Outflows from centralized exchanges like Binance and Coinbase are often considered net positive. Since users control the coins through their non-custodial wallets, they cannot easily sell them for other liquid coins or stablecoins.
Over the years, prices tend to steadily recover when there is extreme fear, especially among LINK holders. Much like the events of March 2020, when cryptocurrency prices suddenly plummeted due to a COVID-19-induced crash, aggressive investors may view such drops as an opportunity to buy.
In March 2020, LINK fell by a massive 70%. However, months later, as the money printers turned on, cryptocurrency prices surged, pushing LINK’s value up nearly 35x at its 2021 peak.
Similar to what happened back then, falling prices coupled with exchange outflows and cross-entity accumulation make it likely that LINK will recover strongly.
Most of the headlines are in red, But Partners are interested in Chainlink solutions
So far, the data from IntoTheBlock reveals that 65% of LINK holders are at a loss, and Only 32% are in the green. However, it is encouraging that most LINK holders have “diamond hands” and have been holding their reserves for over a year.
The more long-term holders or addresses hold the coin or token for more than 155 days, the more resilient prices will be to the sell-off.
In addition to the price action, optimism is high among LINK holders. Chainlink is a leading decentralized oracle provider offering services for DeFi and nft protocols.
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At the same time, middleware developer Chainlink Labs continues to build quality partnerships. Recently, 21Shares integrated Chainlink’s proof-of-reserve into ethereum to improve transparency.
Featured image by DALLE, chart by TradingView
