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Projecting the impact on LINK’s price after 21 million token unlock

3min Read

A hike in circulating supply may invalidate LINK’s previously bullish predictions.

Chainlink news

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  • Project sent 18.25 million tokens to an exchange out of the 21 million tokens unlocked
  • LINK’s price might fall to $12.95 with resistance appearing at $13.90

Chainlink [LINK], the decentralized Oracle network, has released 21 million tokens out of its non-circulating supply. At the time of release, the tokens were worth $295 million.

Chainlink’s circulating supply has been capped at 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 might face high volatility. In most cases, the value falls soon after. In this case, according to Spot On Chain, Chainlink sent 18.25 million tokens to Binance after the unlock.

Is more supply good news?

Sending to an exchange implies that the project is ready to sell. However, it also transferred 2.25. million, value at $31.30 million, to its multi-sig wallet.

A multi-sig wallet is a short form for a multi-signature wallet. It is a wallet that utilizes private keys to access cryptocurrencies, and requires more than one person to transfer assets.

The transfer to the wallet suggested that Chainlink might not be selling the tokens there anytime soon.

Chainlink token release

Source: Spot On Chain

At press time, LINK was valued at $13.72, representing a 3.58% fall in the last 24 hours. This decline could be an aftereffect of the exchange transfer mentioned above.

Hence, the question – Will LINK’s price continue to fall? Let’s look at it from an on-chain perspective. AMCrypto analyzed this potential by looking at the velocity.

LINK gets set to slip below $13

Velocity measures how quickly tokens are circulating on a network. If the metric is at a low spot, it means that tokens are held, rather than circulated.

Therefore, this can make the price stable or lead to a hike in price. However, according to Glassnode, LINK’s velocity has been rising since 20 June. This means that its higher frequency of transactions could trigger volatility soon.

Should the reading continue to climb, LINK’s price might be affected. Hence, a decline below $13 could be possible too.

Chainlink circulation jumps

Source: Glassnode

Further evidence of the potential decline was revealed by the IOMAP.  Here, this acronym stands for In/Out of Money At Price.

With the metric, Chainlink traders can spot potential support and resistance levels. The larger the cluster of addresses at a point, the better the support or resistance it can provide.

According to IntoTheBlock, 12,090 addresses bought 5.84 million LINK at an average price of $13.40. Here, it is important to note that this group are in profits.

However, the other set of 14,140 addresses purchased 11.62 million tokens at $13.90. This cohort are in losses. Simply put, the higher number of addresses suggests that LINK might not be able to rise to $14.

Chainlink's price set to decrease

Source: IntoTheBlock


Read Chainlink [LINK] Price Prediction 2024-2025


This, because some of the holders in loss could decide to break even if LINK hits $13.90. Should this be the case, the price of the cryptocurrency might drop to $12.95 in the short term.

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Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
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