The falling exchange balance indicates a growing demand for Chainlink. However, this does not necessarily indicate strong bullish sentiment. So where is LINK headed?

  • Chainlink will be upgrading its Chainlink staking solution.

  • Why the upgrade won’t necessarily trigger massive demand for LINK.

When the Chainlink [LINK] network revealed plans to launch Chainlink Staing V0.2, the announcement likely caused some excitement among LINK traders, but let’s explore why.

Chainlink launched its initial version called Chainlink Stake V0.1 at the end of 2022. The launch of this version caused a warm response, and the staking pool was filled within a few hours of its launch.

The network’s latest announcement revealed that the next iteration of Chainlink staking will have a maximum pool size of 45 million LINK.

In addition, Chainlink Stake V0.2 will also feature some upgrades over previous versions, such as dynamic rewards, better security, and more Staking flexibility. Perhaps the biggest question here is whether it will have an impact on the demand for LINK.

Once Chainlink Stake V0.2 is launched, the demand for LINK may increase significantly. However, it may not have much impact on its price trend. This is because most of the price impact on LINK comes from speculative trading.

If the launch of Chainlink Stake V0.2 triggers a significant shift in market sentiment, the impact on LINK price action will be more pronounced. The news has already triggered a significant surge in social dominance over the past 24 hours. However, weighted sentiment remains near a four-week low, indicating that market sentiment remains depressed.

A long-term descending resistance line has supported LINK’s upper limit, while the lower limit has been moving along the ascending support. After retesting the descending resistance, the coin’s price action at press time is $7.36, having fallen 11% since the beginning of October.

At press time, LINK is at a crossroads with uncertain direction. The market is showing signs of improvement, but macroeconomic factors suggest that a liquidity crunch may also be in the cards.

Here’s what’s happening amid the uncertainty, which could indicate where LINK is headed in the near term.On-chain data shows that the supply of LINK held outside exchanges has been rising over the past four weeks. This suggests that demand has been growing.

The growing demand indicated by the falling exchange balances does not necessarily indicate strong bullish momentum. On the contrary, the supply held by the top addresses fell sharply in the second week of October.

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