Chainlink (LINK) Gets Set to Slip Below $13 as New Set of Tokens Unlock

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 has released 21 million tokens from its non-circulating supply. At the time of release, the tokens were valued at $295 million.

Chainlink’s circulating supply is 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.

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.

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.

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.