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- Chainlink unlocked 11.2 million LINK tokens and sent 8.2 million into Binance.
- LINK’s market structure had become bearish and may not reclaim $17.22 in the short term.
- The LINK price has the potential to drop below $14 as selling pressure continues to increase.
In an unexpected circumstance, two Chainlink (LINK) non-circulating supply addresses sent $128 million worth of the token into Binance, based on data from Etherscan. This value was part of the 11.2 million unlocked tokens and the transfer implied that these tokens would be sold.
However, the action came as a surprise to the Chainlink community. This is because the project had initially said that the non-circulating supply would not be sold but be used as subsidies, and rewards for the network nodes.
An Explanation Is Not Enough
Some comments related to the disclosure showed that LINK holders were not dissatisfied with the development. However, ChainlinkGod, a community ambassador of the project tried to explain the reason for the action.
In a post on X, ChainlinkGod referred to the communication in June that the web3 project had, noting that the transaction was nothing out of the ordinary. From the message shared, there was a token release schedule that also included the Oracle (NYSE:ORCL) rewards initially mentioned.
This is a part of the long term token release schedule, communicated back in June, with usage including LINK paid to nodes as oracle rewards, as well as treasury diversification for developmentMore context:https://t.co/K8WHHW9HRZ pic.twitter.com/3zFjgoTeWt— ChainLinkGod.eth (@ChainLinkGod) December 16, 2023
However, some members of the community were not pleased with the ambassador’s clarification. For instance, a certain RustySailor handle asked ChainlinkGod to explain what happens when all the tokens become fully-circulating.
But at press time, he had not responded to the question. For some, the transfer means that the Chainlink team had planned to “dump” on its community. LINK is one altcoin that has outperformed others in the last 365 days.
Not the Time to Long LINK
According to CoinMarketCap, the token value had increased by 123% within the said period. However, the last seven days have not been the same for LINK. At the time of writing, LINK’s price was $14.47, indicating a 15.37% decrease in the last seven days. From the LINK/USD 4-hour chart, the token’s market structure had switched from bullish to bearish.
Also, the $14.55 support had been lost to selling pressure. Considering the current state, LINK may find it difficult to reclaim the $17.22 peak it hit on December 10. If selling pressure continues, then LINK may have no other option than to fall from $14.
The Exponential Moving Average (EMA) also supported this possibility. As of this writing, the 9 EMA (blue) had crossed below the 20 EMA (yellow). This trend means that LINK is bearish.
LINK/USD 4-Hour Chart (Source: TradingView)
At the same time, it is important to pay attention to the crossovers. If the 9 and 20 EMAs get closer than they currently are, the next direction could become challenging to predict. Hence, it may be better to steer clear of opening long or short positions as any reversal setup could be next.
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