- Project sent 18.25 million tokens to an exchange of the 21 million unlocked tokens
- LINK price could fall to $12.95, while resistance would appear at $13.90
Chain link [LINK], the Oracle decentralized network, has released 21 million tokens from its non-circulating offering. At the time of release, the tokens were worth $295 million.
Chainlink’s circulating supply is limited to 1 billion tokens. Therefore, the release of new tokens could put pressure on the price.
Historically, when a new set of tokens is unlocked, the asset in question can experience high volatility. In most cases the value drops shortly afterwards. In this case, Chainlink then sent 18.25 million tokens to Binance, according to Spot On Chain unlock.
Is more supply good news?
Sending to an exchange implies that the project is ready to sell. However, she also transferred 2.25. million, worth $31.30 million, to its multi-sig wallet.
A multi-sign wallet is short for a wallet with multiple signatures. It is a wallet that uses private keys to access cryptocurrencies, and requires more than one person to transfer assets.
The transfer to the wallet suggested that Chainlink might not sell the tokens there anytime soon.
Source: Spot On Chain
At the time of writing, LINK was valued at $13.72, representing a decline of 3.58% in the past 24 hours. This decline could be an aftereffect of the aforementioned currency transfer.
Hence the question: will LINK’s price continue to fall? Let’s look at it from a chain perspective. AMCrypto analyzed this potential by looking at speed.
LINK will likely fall below $13
Velocity measures how quickly tokens circulate on a network. If the metric is at a low point, it means tokens are being held instead of in circulation.
Therefore, this can make the price stable or lead to a price increase. According to Glassnode, LINKs the speed has increased since June 20. This means that the higher transaction frequency could soon lead to volatility.
If the price continues to rise, this could have consequences for the price of LINK. A drop below $13 could therefore also be possible.
Source: Glassnode
Further proof of the potential decline was revealed by the IOMAP. This acronym stands for In/Out of Money At Price.
The metric allows Chainlink traders to discover potential support and resistance levels. The larger the cluster of addresses at a given point, the better the support or resistance it can provide.
According to IntoTheBlock, 12,090 addresses purchased 5.84 million LINKs at an average price of $13.40. Here it is important to note that this group makes a profit.
However, the other set of 14,140 addresses purchased 11.62 million tokens for $13.90. This cohort is suffering losses. Simply put, the higher number of addresses suggests that LINK may not be able to rise to $14.
Source: IntoTheBlock
Read Chainlink [LINK] Price forecast 2024-2025
This is because some of the losing holders might decide to break even if LINK reaches $13.90. If this is the case, the price of the cryptocurrency could fall to $12.95 in the short term.
