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Chainlink – Assessing market impact after $269M LINK unlock
On March 15, a massive event transpired in the cryptocurrency market as Chainlink unlocked a staggering $269 million worth of tokens. This development has sparked considerable interest and anxiety among investors, traders, and enthusiasts alike. As we assess the market impact of this monumental transaction, it is essential to analyze various factors that could shape the direction of LINK’s price.
Initially, it appears that the token has remained unscathed by the unlock, as its value surged approximately 6% following Bitcoin’s rebound to $85k. However, experts caution against drawing premature conclusions. A closer examination of past unlocks reveals some fascinating insights.
Historical data suggests that Chainlink’s post-unlock performance is not entirely consistent. In fact, previous unlocks have been met with mixed reactions. While LINK did experience a red daily session close for most events, it was followed by a local bottom formation and a subsequent recovery. This raises the question: Will we see a repeat of this trend?
Furthermore, whale wallets holding between 10M-100M LINK tokens offloaded approximately 13 million tokens just before the unlock event on March 13. In stark contrast, smaller wallets with holdings between 1M-10M LINK absorbed these offloads and now hold roughly half of the entire LINK supply. This dichotomy could lead to unpredictable market fluctuations.
Another crucial consideration is the trading activity on centralized exchanges (CEXs). Initially, selling pressure appeared flat, but there has been a noticeable increase in sell-offs over the past two days preceding the unlock event. This uptick in offloading has led to a slight rise in exchange reserves, reaching 31M tokens as of press time.
Moreover, we noticed an anomaly on derivatives exchanges, where exchange reserves also saw a sharp spike. This surge hints at heightened volatility and potential liquidation risks if excessive leverage is involved.
Lastly, from a technical perspective, LINK has bounced from its range-lows within the descending channel. If this upward momentum persists, it may challenge the mid-range of $16-$17. Conversely, sustained selling pressure could propel the token down to November’s U.S election levels of $10.
In conclusion, assessing the market impact following this massive unlock event is a complex task that demands careful consideration of numerous factors. It remains uncertain whether LINK will repeat its previous pattern or respond differently due to these newly presented dynamics. One thing is clear: The cryptocurrency market is in for an unpredictable ride, and investors should be prepared for any outcome.
This article originally appeared on AMBCrypto News and has been republished with permission.
Source: https://ambcrypto.com/chainlink-assessing-market-impact-after-269m-link-unlock/
