On-chain data shows Chainlink (LINK) has seen a month of consistent outflows, something that could prove to be bullish for the altcoin's price.

Chainlink Exchange Netflow Has Been Negative Recently

In a recent X post, market intelligence platform IntoTheBlock discussed the trend in the Exchange Netflow for Chainlink (LINK).

The “Exchange Netflow” is an on-chain metric that measures the net amount of a cryptocurrency flowing into or out of the wallets associated with centralized exchanges. A positive value for this indicator implies that investors are transferring more tokens into these exchanges.

Since one of the main reasons for holders to transfer their coins to exchanges is for selling-related purposes, this kind of trend can have a bearish implication for the asset’s price.

However, when the indicator is in the negative zone, it suggests that exchange outflows are outweighing the inflows. Generally, investors take their coins away from the custody of central entities when they want to hold them for the long term, so such a trend can have a bullish impact on the cryptocurrency.

Now, here is the chart shared by the analytics firm that shows the trend in the Chainlink Exchange Netflow over the past month:

As displayed in the graph, the Link Chain Netflow has been in the negative region for almost all of the past month, implying that investors have constantly been making net withdrawals from the exchanges.

In total, the exchanges have registered net outflows of $120 million in this period. Such a trend could suggest that investors have been in a phase of accumulation, as they are transferring the coin out of the exchanges’ custody.

During the last few days, LINK has enjoyed some recovery in its price, which could potentially be an effect of this buying activity. The Exchange Netflow is something to keep an eye on in the coming days, as where it heads next could also have an influence on the coin.

Naturally, the outflow streak continuing would be a bullish sign for Chainlink, while the indicator seeing a reversal into the positive region could mean a bearish end for the recovery run.

Speaking of the price recovery, on-chain data could hint at where the next major resistance wall could lie for LINK, as analyst Ali Martinez has explained in an X post.

From the above chart, it’s visible that the Chainlink investors last purchased a total of 181.42 million LINK inside the $14.32 to $16.43 range. These investors, who are currently underwater, may provide some resistance to the price if a retest occurs, as they could be desperate to exit at their break-even.