Chainlink price faces risk of correction as supply on exchanges climbs
- Chainlink supply on exchanges climbed to nearly 15%, a level previously seen on January 4.
- LINK token reserves on exchanges could increase selling pressure on the altcoin, driving the price lower.
- LINK price gained 1.13% on the day, after nearly 5% losses in the past week.
Chainlink, the token of a decentralized blockchain oracle network, likely faces the risk of a price correction, according to on-chain metrics.
When exchange supply decreases it is considered that selling pressure has likely reduced, and the asset’s price is expected to rally. In the case of LINK, exchange supply is on the rise, after its initial decline between December 26 and January 4.
Also read: Bitcoin price could recover to $45,000 as addresses with less than 1 BTC likely bottomed out
LINK on exchanges increases amidst declining network growth
Key on-chain metrics like Chainlink’s supply on exchanges and network growth paint a bearish picture for LINK price. Supply on exchanges has climbed from 14.85% on January 4 to nearly 15% (14.94%) on January 29, according to Santiment data.
An increase in exchange supply has typically influenced LINK price negatively in the past. As traders shed their LINK holdings, price drops. If history repeats, rising supply of LINK tokens could push its price lower.
 [16.07.26, 29 Jan, 2024]-638421237062320989.png)
Chainlink supply on exchanges. Source: Santiment
Network growth is a metric used to identify the relevance of an asset and its demand among market participants. The metric has noted a decrease between January 4 and 29. This is a bearish divergence on the January 4 to 19 timeframe, seen in the chart below.
 [16.09.46, 29 Jan, 2024]-638421237453938208.png)
Network Growth on LINK. Source: Santiment
The drop in network growth is a bearish sign. When combined with exchange supply, these on-chain metrics signal a correction in LINK price.
New Chainlink integrations
Chainlink officially announced eight integrations of five services across Arbitrum, Avalanche, Base, BNB Chain, Ethereum and Polygon. New integrations were seen on Arbitrum, Base, Courtyard NFT, Fearless Wallet, Morpho Labs, Ombi Hub and Pancake Swap.
⬡ Chainlink Adoption Update ⬡
— Chainlink (@chainlink) January 28, 2024
This week, there were 8 integrations of 5 #Chainlink services across 6 different chains: @arbitrum, @avax, @base, @BNBCHAIN, @ethereum, and @0xPolygon.
New integrations include @arbitrum, @base, @Courtyard_NFT, @FearlessWallet, Morpho… pic.twitter.com/fU0jw5e2eY
LINK’s adoption in the ecosystem boosts its utility and supports demand for the asset. This could help Chainlink sustain its relevance among market participants.
At the time of writing, LINK price is $14.64, up 1.08% on the day.
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.
