Chainlink has recently released 21 million tokens, previously not in circulation, valued at approximately $295 million. This significant token release has sparked concerns about its impact on the token’s price, given Chainlink’s limited circulating supply of 1 billion tokens. Historical data suggests that an increase in supply from token unlocks typically leads to lower prices. Following the recent token release, 18.25 million tokens were sent to Binance, according to data from Spot On Chain.
Implications of Recent Transfers
The transfer of cryptocurrencies to exchanges is generally seen as a precursor to a sale, adding to market apprehensions. In addition to the tokens sent to Binance, 2.25 million LINK worth $31.30 million were moved to a multi-sig wallet, indicating these might not be sold immediately. At the time of this report, LINK was trading at $13.61, showing a 1.37% drop in the last 24 hours, possibly influenced by these transfers. The central question now is whether LINK’s price will continue to fall.
What Will Happen to LINK Prices?
Network speed is a critical indicator of how fast transactions are processed. A low speed suggests tokens are being held rather than circulated, which could potentially boost prices due to reduced supply. However, Glassnode data reveals that LINK’s network speed has been rising since June 20, indicating increased circulation.
If this trend persists, LINK’s price might rise. Conversely, a drop below $13 could still occur. The IOMAP indicator, which tracks price inflows and outflows, also hints at potential declines.
Market Resistance and Support Levels
– Investors should monitor network speed as an indicator of token circulation and potential price changes.
– Keep an eye on the IOMAP indicator for insights on resistance and support levels for LINK.
– Recognize that a high concentration of addresses holding LINK at certain price points can influence market movements.
Chainlink investors face critical resistance and support levels, as indicated by data from IntoTheBlock. Around 12,090 addresses bought 5.84 million LINK at an average price of $13.40, currently in profit. Conversely, 14,140 addresses purchased 11.62 million tokens at $13.90 and are facing losses. This suggests that LINK may struggle to rise above $14 due to the concentration of addresses holding the token.
Because some investors are currently at a loss, a price drop to $12.95 could happen even if LINK reaches $13.90. This market dynamic underscores the potential volatility and challenges in predicting LINK’s future price movements.