The principle of supply and demand dictates that reducing available assets while demand remains steady or grows often leads to increased value. This "supply squeeze" can be a powerful catalyst for long-term growth and price rallies in the market. Chainlink (LINK) appears to be strategically leveraging this mechanism, locking up a significant portion of its total supply. However, despite these efforts and robust fundamentals, LINK's recent market performance has raised questions about whether it is currently undervalued.
Chainlink's Strategic Supply Squeeze
Chainlink has been aggressively accumulating LINK, recently adding over 99,103 tokens in its largest single acquisition to date. This brings the total LINK locked in reserves to an impressive 1.77 million, marking a substantial 377% increase since before Q4 2025. Crucially, this accumulation is financed through Chainlink's on- and off-chain revenue streams, signaling strong adoption and active network usage. Despite this clear move to tighten supply and underlying network strength, LINK has paradoxically seen considerable underperformance, dipping 39% in Q4 2025 and an additional 11.7% in 2026.
Strong Fundamentals Amidst Perceived Undervaluation
The divergence between Chainlink's tightening supply and its price action suggests a potential market undervaluation, which can often be a bullish indicator. Chainlink's core function as a decentralized oracle network generates substantial revenue through fees whenever smart contracts on various chains utilize its services. Proof of this robust activity can be seen in the recent all-time high fees collected across 13 chains, with Ethereum alone contributing $6.8 million. This consistent flow of on-chain revenue directly into LINK reserves, coupled with growing network usage, underscores solid fundamentals. Many observers believe the current price pullback is primarily due to broader market sentiment rather than a reflection of Chainlink's intrinsic value, positioning LINK for a significant scarcity-driven rally once market demand re-engages.
