A lot of cryptocurrency enthusiasts keep their funds on exchanges. Doing so for extended periods of time is not advised. The ChainLink community seems to get the message, as LINK balances on exchanges continue to dwindle.
The ChainLink Trend Continues
Not too long ago, it became apparent that LINK balances on exchanges were on the decline. That is a good sign, albeit it also reduces overall market liquidity. With fewer tokens on exchanges, the prices are less prone to extensive volatility on a daily basis.
Since that previous look at exchanges’ LINK holdings, the trend has continued. More and more money is being moved off centralized trading platforms. A positive and prominent trend that doesn’t apply to all markets by any means. As such, one has to wonder what is driving LINK holders to take this course of action.
According to recent statistics, the amount of LINK on exchanges will drop below 85 million fairly soon. This is in stark contrast to 126.593 million LINK in late May of 2019. Since this decline in ChainLink exchange balance volume, the price has continued to move up. Even after hitting over $3, there is no indication more people want to sell their holdings all of a sudden.
A Minor Increase in Withdrawals
One would assume that there are more withdrawals from exchange wallets. After all, the “disappearing” funds have to go somewhere. Interestingly, the ChainLink withdrawals have not increased all that much. Last week, 327 transfers from exchanges were recorded. A minor increase compared to 282 transfers a day prior.
With no real increase in withdrawals, the amount being withdrawn should increase. Again, that is not necessarily the case. On February 2nd, the transfer volume from exchanges was 425,614 LINK.
During the first two days of February, over 825,000 LINK has been withdrawn from exchanges. All of these amounts will add up over time. That will, in turn, reduce the amount of LINK on trading platforms and create a new degree of scarcity.