Chainlink outperforms altcoins in September with dwindling exchange supply
- LINK price climbed 25% in the past two weeks as Chainlink tokens leave exchanges and move to cold wallets.
- Chainlink token supply on exchanges has decreased 16.4% over the past ten days.
- Crypto analyst remains bullish on LINK token for a six month time frame, predicts strong performance in the next cycle.
Chainlink (LINK) has outperformed most altcoins in September with 25% gains over the past two weeks. LINK tokens are consistently being pulled out of exchanges and being moved to cold wallets, reducing the selling pressure on the asset.
Pseudonymous crypto analyst, Altcoin Sherpa is bullish on LINK in the long timeframe of six months.
Also read: Terra Classic community ends minting of USTC tokens, opens doors to token burn
Chainlink supply on exchanges declines 16.4%
Chainlink emerged as a top performer compared to other altcoins in September, with 25% gains since Monday, September 11’s intraday low of $5.747. Early on September 25, the token is trading at $7.231.
LINK’s price gain was accompanied by a declining supply across centralized exchanges. Based on data from crypto intelligence tracker Santiment, LINK supply dropped 16.4% over the past ten days. Typically, a reduction in an asset’s supply reduces the selling pressure on it and supports a bullish thesis.
Chainlink supply on exchanges drops
Analysts at Santiment explain that the tokens leaving exchanges are flowing to cold wallets, typically a physical wallet that is not connected to the internet. LINK tokens sent to cold wallets are therefore removed from circulation, unless they are sent to cryptocurrency exchanges for trading or profit-taking.
LINK’s movement out of exchanges to cold wallets is another driver of the bullish thesis for the altcoin.
LINK could outperform altcoins in the next cycle
Popular crypto analyst, Altcoin Sherpa informed his 196,400 followers that LINK is one of the altcoins that they consider holding for over six months. The analyst argues that Chainlink token is a strong one when compared to other tokens, in terms of price potential. Therefore, Sherpa considers holding LINK for the next cycle.
$LINK: Still 1 of the few coins that I would consider just buying a bag of and letting it sit for the next 6 months+, I think this is going to be a very strong one for next cycle. Core infrastructure for a ton of projects w. few competitors. #LINK pic.twitter.com/4MpnM8vuSB
— Altcoin Sherpa (@AltcoinSherpa) September 25, 2023
At the time of writing, LINK price is $7.288 on Binance.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
