As a researcher with experience in the crypto market, I’m keeping a close eye on Chainlink (LINK) as it faces another significant token unlock and subsequent price declines. The recent unlock of 21 million LINK tokens, valued at $295 million, has flooded the market and sent most of them to Binance, fueling speculation of a potential price dip.
As a crypto investor, I’d prepare myself for the influx of freshly unlocked Chainlink (LINK) tokens entering the market. Recently, Chainlink released 21 million LINK tokens, worth approximately $295 million, from five of its previously non-circulating supply contracts.
As an analyst, I’ve observed that a significant amount of Chainlink tokens were transferred to Binance, fueling suspicions of an imminent price drop for this cryptocurrency. With Chainlink already experiencing an 8% decline over the past week and the broader market trending downward, these concerns have gained momentum.
LINK Continues Slipping Amidst Token Unlock
Chainlink, much like other cryptocurrency tokens, follows a token release plan that results in around a 7% yearly increase to the total circulating LINK supply. In the most recent event, this figure surpassed 600 million for the initial time. Following the unlock, a significant amount of 18.25 million LINK tokens, valued at approximately $265 million, transferred directly to Binance.
Approximately 2.25 million LINK tokens, equivalent to around $31.3 million, were transferred to the multisignature wallet addressed as 0xD50f on Binance. Given the significant volume involved, LINK investors may feel compelled to sell their holdings, apprehensive about a possible price drop. The heightened buying pressure might lead to further price decreases for LINK in the near term.
It’s intriguing that the unlock event appeared to accelerate LINK‘s downward trend, as it failed to regain support during broader market price drops. The cryptocurrency experienced an additional 1.4% decrease in value.
Chainlink Further Declines To $10?
I’ve noticed that Spot On Chain reported 127 million LINK tokens being unlocked recently, with 107.7 million of those tokens making their way to Binance since August 2022. Previously, during similar unlocks, the price has generally remained stable. It appears that investors in LINK have grown accustomed to these periodic events and associated token transfers to Binance.
Examining the graph beneath, it’s clear that LINK experienced price surges following three out of the last four unlocks. Yet, given the present market circumstances, an alternative outcome is plausible.
Currently, as I pen this down, LINK is valued at $13.64 on the market. It’s inching nearer to the critical support of $13.5. Should it fail to rebound from this level, there’s a possibility of a steep decline towards $10. From a technical standpoint, the significance of $10 lies in its role as a strong psychological anchor, influencing whether LINK continues to trade above the double-digit mark. If surpassed, it could provoke stop-loss orders and aggravate the selling pressure.
Approximately 391.5 million units of LINK, valued at around $5.4 billion, remain locked within 24 contracts. The eventual release could influence the price of LINK, but the outcome is uncertain and will depend on the passage of time.
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2024-06-25 08:41