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Chainlink Unlocked: $264M Worth of LINK Tokens Sent to Binance, Will This Trigger a Slump to $10?
Get ready as new LINK tokens continually flood the market. Chainlink, as part of its periodic unlocks, recently unlocked 21 million LINK tokens, valued at $295 million, from five of its non-circulating supply contracts.
AS noticed by Spot On Chain, most of these tokens were sent to cryptocurrency exchange Binance, sparking speculation about the possibility of this fall into a dive in the price of Chainlink. These speculations have been further intensified, considering that Chainlink has not been left behind in time decline of the broader market and is currently down 8% over the past seven days.
LINK keeps slipping while unlocking tokens
Like many crypto tokens, Chainlink has a token unlock program that guarantees an annual LINK release rate of approximately 7% of the total circulating supply. The recent unlock saw the number of LINK tokens in circulation surpass 600 million for the first time. Immediately after the unlock, 18.25 million LINK tokens worth $265 million were immediately sent to Binance.
Another 2.25 million LINK tokens, worth $31.3 million, were sent to a multisig wallet identified as 0xD50f. With such a large supply hitting Binance, LINK holders may be tempted to exit their positions, fearing a potential price collapse. This increase in demand could signal further declines in LINK’s price soon.
Interestingly, the unblocking appears to have contributed to a further decline in the price of LINK, which has struggled to find support amid broader price declines. LINK fell a further 1.4%.
Chainlink drops further to $10?
As spotted by Spot On Chain, the recent unlock involves unlocking 127 million LINK tokens and sending 107.7 million LINK tokens to Binance since August 2022. However, the price has mostly stabilized during the previous unlocks, and it seems that LINK investors are already familiar with these periodic unlocks and movement in Binance.
A look at the chart below shows that three of the last four breakouts have preceded any price spikes for LINK. However, considering the current market conditions, we could see a different scenario.
At the time of writing, LINK is trading at $13.64 and is approaching support at $13.5. Failure to bounce off the support could open a free fall up to $10. Technically, the $10 level is currently serving as a key psychological support in determining whether LINK will continue to trade in double digits. If violated, it could trigger stop losses and intensify the sell-off.
391.5 million LINKs worth $5.4 billion across 24 contracts remain to be unlocked. Only time will tell how they might impact LINK’s price.
Featured image created with Dall.E, chart from Tradingview.com