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Why Chainlink bears shouldn’t celebrate just yet

Although Chainlink sent tokens from its wallets to an exchange, the motive was different from what would have expected.

Published

1 year ago

on

  • LINK bulls were in the process of repelling bearish dominance amid the bid to cover operational costs.
  • Chainlink development activity soared, likewise, its circulation.

The price of Chainlink [LINK] withstood the initial fear of falling to selling pressure after the decentralized oracle network sent 21 million tokens out of its wallets. On 16 June, Chainlink transferred the tokens out of its non-circulating supply.

Read Chainlink’s [LINK] Price Prediction 2023-2024

Around $95 million worth of tokens were sent to Binance, according to the Etherscan transaction receipt. Usually, such an action shows a motive to sell off the tokens and push LINK into a downward trend.

While large transfers can often trigger bearish sentiment, LINK went the opposite route, increasing by 1.20% in the last 24 hours. 

Fizzling out the red appearance

According to the LINK/USD daily chart, bears pulled down LINK to $5.013 from $5.995 up until 12 June. But bulls’ demand fought off another attempt by bears to send the price sliding. This ensured that LINK’s price rose to $5.346.

Despite increased demand, the Awesome Oscillator (AO) indicated that LINK was oscillating between sellers’ dominance and buyers’ desire to control. At press time, the AO was -0.855.

Source: TradingView

From the above chart, the negative AO implies that the token was mostly in bearish territory. However, the fluctuating green bars suggest that short-term
momentum might soon increase rapidly compared to the long-term.

However, Chainklink had clarified earlier that the idea behind the token transfer was not to dump on its community. Rather, it was to cover the fees of its coordinators, node operators, and stakers.

The project’s community ambassador ChainlinkGod explained that the action was necessary because of the infrastructural development of Chainlink Economics 2.0. 

In September 2022, the web3 firm introduced Chainlink Economics 2.0 to scale the growth of the blockchain and Layer Two (L2) networks on the network using low-latency smart contracts. 

Spreading “LINKs” and an advancing blockchain

In the interim, Chainlink’s development activity increased to 65.86. Typically, an increase in this metric suggests that public GitHub repositories connected to the network had improved. Hence, this aligns with increasing developer contribution to the project.

As per the seven-day circulation, Santiment revealed

that LINK increased significantly between 5 and 17 June.

Realistic or not, here’s LINK’s market cap in BTC terms

While the metric decreased slightly at press time, the hike suggests that a high number of LINK tokens were involved in transactions within the aforementioned period. 

Source: Santiment

At the time of writing, LINK’s value was $5.37. And in the last 24 hours, the trading volume increased to $130.92 million. But since the increase was a slight one, it implied that the token price did not have adequate strength to back the uptrend.

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