Today, Chainlink news seems to be positive, as new reports show that investor confidence is growing. A recent report shows that the exchange outflows of LINK tokens have been increasing in the past month. Additionally, the Digital Chamber, an American crypto advocacy group, has also shared some important news. Based on this organization’s announcement, Chainlink is now an official member of the Executive Committee for this group. Additionally, the Link price seems to have benefited from these developments as well. This is seen in an 11.17% daily increase in Chainlink price, which puts the value at $14.55.
Rising LINK Exchange Outflow Signals Investor Confidence
Based on a recent X post from the official page of the market intelligence firm IntoTheBlock, the LINK exchange outflows have increased. This change was seen in the decrease of the exchange netflow metric. This metric shows the number of LINK tokens going in and out of the wallets that are known to belong to centralized exchanges. When this on-chain metric is positive and above 0, we know that users have been depositing their tokens. This usually means the investors are getting ready to sell their crypto or that they have already sold. As such, for instance, if the LINK exchange netflow is positive, the Chainlink price is likely bearish.
The exchange netflow goes under the zero mark and becomes negative if the outflows outweigh the inflows. This historically means that investors are now holding their tokens, and they don’t intend to sell in the short term. For example, if the exchange netflow of Chainlink becomes negative, the LINK price sentiment and trend will likely become positive. Such a surge in investor confidence could have multiple causes, one of which could be the broader improvement in market sentiment. However, the recent Chainlink news about its inclusion in the Digital Chamber group could have also increased the investors’ confidence.
Why Are Investors Withdrawing LINK Tokens?
Based on the report, the LINK token exchange netflow has been negative for almost a month now. As such, the Chainlink investors have likely been making withdrawals all month and have continued to accumulate LINK tokens. This accumulation has resulted in a monthly net outflow of $120 million in LINK coins. Logically, this constant outflow of tokens has decreased the LINK supply, which can help to increase the buying pressure for the token. As such, investors should keep monitoring this level for further developments.
Why Chainlink is the Backbone of Blockchain Infrastructure?
The announcement of Chainlink’s new role in the Executive Committee of the Digital Chamber has caused an uproar. This development has caused a resurgence of excitement in the community and has increased hopes for the future of this token. The Digital Chamber announcement has also been called the Chainlink network, the backbone of the blockchain system. This is because this crypto giant has been enabling transactions related to banks and tokenized assets worth trillions of dollars. Many different institutions and financial entities use the Chainlink system for high-security cross-chain connectivity. Swift, Euroclear, the Central Bank of Brazil, Aave, and Lido protocols are some notable examples.
Could External Economic Forces Halt LINK’s Bullish Run?
Today’s explosive growth in LINK price has also been a result of the larger crypto market rally. As such, external forces like macroeconomics also matter. Additionally, the exchange netflow metric can also be a signal for a possible reversal in trend. If this metric becomes positive, investors should expect an incoming bearish trend. As such, investors should follow the global economic developments alongside On-chain metrics.
Source: Coinfomania / Digpu NewsTex