Chainlink Unlocks $264 Million in Tokens
Chainlink's recent release of $264 million in tokens to Binance has sparked fears of a potential price drop to $10 amidst ongoing market declines.
Chainlink recently released 21 million LINK tokens worth $295 million from its non-circulating supply contracts. Most of these tokens were sent to Binance, causing concerns about a possible price drop for Chainlink.
Spot On Chain reported that this influx could worsen Chainlink's current price decline. After the unlock, 18.25 million LINK tokens worth $265 million went to Binance, and another 2.25 million LINK tokens valued at $31.3 million were sent to a multisig wallet identified as 0xD50f. This increase in supply on Binance might lead holders to sell, fearing a further price crash.
Chainlink has a token unlock schedule releasing about 7% of the total supply annually. Since August 2022, 127 million LINK tokens have been unlocked, with 107.7 million going to Binance. Despite these significant movements, the price has mostly remained stable, indicating that investors might be accustomed to these unlocks. However, the current market is different, and LINK is trading near a crucial support level of $13.5. If it falls below this, it could drop to $10, a key psychological level, potentially triggering more sell-offs.
There are still 391.5 million LINK tokens worth $5.4 billion left to be unlocked. The timing of these future releases will be crucial in determining LINK's price. The market reaction to these events can vary, but the recent trends show increased volatility.
Chainlink's situation highlights the challenge of scheduled token unlocks. While designed to increase liquidity and support the network, they can also cause price instability. The market's response to these unlocks depends on various factors, including investor sentiment and broader economic conditions.
The recent token unlock has introduced significant uncertainty for Chainlink. With most of the new tokens sent to Binance, fears of a price drop to $10 have grown. The historical resilience provides some hope, but the current market conditions suggest caution. Investors will be watching closely as more tokens are unlocked in the future. The impact on LINK's price remains to be seen.
