Chainlink - Crowd continues to want in despite dumps

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Apr 20, 2020

LINK has been one of the best performing asset in the space so far and went on to hit a new ATH this year. Even with the Black Thursday crypto meltdown, it continues to trend upwards.

What could be driving this growth?

Let's take a quick look.

Supply on exchanges

Supply on exchanges have been trending down since late last year, suggesting that people are buying it up and withdrawing. This alleviates a lot of the sell pressure and given the increased trading volume during this period, it's no wonder the price tends trend upwards (even after the covid19 blackswan event) as there's only so much LINK available to trade with.

Supply on exchanges

Holders distribution

So who might be doing all the withdrawing you ask?

Holder distribution

Well, looking at the holders distribution, we see strong growth in the 100 - 10,000 LINK group or the Retail group as I would like to call it.

6 months ago, this group only had 32,147 addresses but today, it's 47,958 (+49.18%).

The sizable 10,000 - 100,000 LINK group (folks with deeper pockets but not exactly retail) also saw a gradual increase in holders initially. Up until the Black Thursday (March 12th) meltdown which saw a sharp dip of holders, followed by a nice bounce. Suggesting that a new wave of holders took the chance to accumulate cheap.

Meanwhile, the Whales in the 100,000 - 1,000,000 LINK group has been decreasing and most left the group during the Black Thursday period and continues to drop further.

Generally, this is a good sign of healthy distribution. However.....

Top 10 non-exchange holders

..LINK's token supply continues to be centralized around the Top 10 non-exchange holders of the network - with a combined 620M LINK (62% of total supply) held amongst them.

Top 10 holders balance

That's a lot of LINK to distribute and very often, we notice that whenever the Top 10 non-exchange token balance drops, LINK's price tends to tumble shortly after.


Given that the LINK token supply is as such:

35% - Token sale

35% - Node operators

30% - Team

Looking at the Top 10 holder addresses, the following addresses likely belongs to Chainlink team:

Node operators rewards 350,000,000 LINK (35% of total supply)

Team 272,990,421 LINK (27.29% of total supply)

Total: 622,990,421 (62.29% of total supply)

Yes, so the Chainlink team still holds majority of the supply.. and... that's fine. As long as you are watching them closely....

0xdad22a85ef8310ef582b70e4051e543f3153e11f historical balance
0xf37c348b7d19b17b29cd5cfa64cfa48e2d6eb8db historical balance

To watch their historical balance, you can use the Historical balance tool here.

Additionally, here's a signal if you wish to be alerted whenever the team's wallets move at least 10,000 LINK out.

In conclusion..

LINK continues to see strong demand as the retail crowd holders trend upward even after Whales and holders with sizable positions left. Each huge dump saw a change of hands (from weak to strong), giving a chance for new holders to accumulate sizable positions.

Yes, there's a growing crowd but nothing too crazy like what we've seen back in July 2019 when LINK hit peak FOMO with social volume skyrocketing and people calling for ridiculous prices for LINK.

As soon as LINK makes a new high and Social volume spikes, a top might be close (similar to what we saw in the recent highs).

But for now, social volume remains rather conservative, leaving room for price growth. Moreso, when there's still friction in the crowd over LINK. E.g a recent reddit post on r/CryptoCurrency with 300 upvotes talks about how Chainlink is the most overvalued crypto in the space. This tends to send people in disbelief as price continues to trend up.

Crowd aside, one should keep an eye out on Top non-exchange holders' movements, in particular, the team's. It's only natural that they will have to distribute the tokens eventually to grow the network. And when this happens, the market might not be ready for it, resulting in a temp drop.

But it'll eventually trend back upwards as long as new holders are created (like what we observed).

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Apr 20, 2020

Thanks for reading!

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