3 altcoin recorded a significant fall in exchange reserves in the first week of August.

Investors often view the reserve data on the exchange as one of the important indicators to assess the demand for long term holding. When the reserve on the exchange falls, the available supply for purchase becomes scarce, which can drive prices higher.

In the first week of August, some altcoins recorded a significant fall in their reserves on the exchange, just as the altcoin market capitalization began to regain momentum.

Ethereum (ETH)

According to data from CryptoQuant, the amount of ETH held on exchanges hit a three-year low in early August, falling below 19 million ETH.

On August 8th, the price of ETH approached the $4,000 mark. However, this price increase did not prompt many investors to move ETH to the exchange, indicating that holders are not in a hurry to take profits.

ETH reserves across all exchanges | Source: CryptoQuantThe strongest momentum for ETH currently seems to come from demand from institutional investors. According to the statistics on strategic ETH reserves, by the end of July, the total value of strategic ETH reserves had exceeded 10 billion dollars, equivalent to 2.7 million ETH. Just in the first week of August, this figure surged to 11.8 billion dollars with over 3 million coins.

This demand has helped ETH withstand potential selling pressures, such as the large amount being unstaked and the selling activities from the Ethereum Foundation.

"The price of ETH is rising while reserves on the exchange are falling. This indicates that more and more people are holding ETH off the exchange, and this is often seen as a sign of confidence in the long-term value," investor BullishBanter commented.

Chainlink (LINK)

Data from CryptoQuant also shows that Chainlink reserves (LINK) on exchanges have reached a new low in the first week of August. Currently, about 146.2 million LINK is available on exchanges, down 16% from the beginning of the year.

The fall in LINK supply on the exchange coincided with a price recovery of 15%, rising from $15.5 to over $19. This reflects the long term accumulation sentiment returning for this altcoin.

ETH reserves across all exchanges | Source: CryptoQuant"Now let's think about Chainlink reserves. A large LINK supply shock is approaching," investor Quinten commented.

In addition, recent data from Santiment shows that when the price of LINK exceeds $18.4, on-chain data recorded a 4.2% increase in the number of wallets holding between $100,000 and $1 million in LINK. The amount of LINK accumulated also increased by 0.67% just in August.

This development coincides with Chainlink launching Data Streams (real-time data streams on US stocks and ETFs) on August 4 and introducing Chainlink Reserve on August 7 — a mechanism for converting protocol revenue into LINK purchases.

Pi Network (PI)

A report at the end of July warned that the amount of Pi Network (PI) held on exchanges had exceeded 405 million PI. However, according to data from Piscan, this figure has slightly fallen to 403 million PI after the first week of August.

Although the fall is small, this is still a positive signal after many months of increasing PI supply on the exchange.

Reserves of PI on all exchanges | Source: PiscanNotably, the reduction of Pi on exchanges in early August coincided with a sharp 10% fall in Pi's price, down to $0.366 in the first week of the month. This indicates that the trend of accumulating Pi may return, as investors start to see buying opportunities at significantly lower prices compared to the open network phase.

However, data from the exchange still needs to be closely monitored, as the current fall is not strong enough to draw a definitive conclusion.

Minh Anh