Chainlink’s Token Unlock Impact on LINK’s Direction

Chainlink (LINK) unlocked 19 million tokens worth $269 million on March 15 as part of its quarterly schedule, according to the blockchain analytics platform Spot On Chain.

> “14.875M $LINK ($212.9M) was sent to #Binance. 4.125M $LINK ($56.2M) was transferred to multi-sig wallet ‘0xD50’.”

Despite this substantial unlock, LINK remained stable, seeing a 6% increase coinciding with Bitcoin’s rebound to $85,000. This raises the question: Can LINK maintain its position following this unlock? AMBCrypto analyzed former price reactions to unlocks for insight.

Post-Unlock Analysis of LINK

Spot On Chain indicated that the latest unlock was on par with the February 2024 unlock but lower than the 21 million tokens released in June of the previous year. Past unlock events were compared to Bitcoin’s price action using charts.

Historically, LINK closed with losses for most unlocks, except for last September; however, it typically rebounded after one to two days unless Bitcoin experienced further declines.

Prior to the unlock, whale wallets holding 10M-100M LINK tokens offloaded approximately 13 million tokens. As of now, they possess 467.63 million LINK tokens in total. In contrast, the smaller wallet cohort (1M-10M LINK) absorbed this sell-off, holding about half of the total.

A significant player took a long position on LINK worth $7.1 million shortly before the unlock but later faced losses. Spot On Chain reported:

> “The ‘50x ETH’ whale dumped 1.34M $LINK on-chain for $18.36M at ~$13.7 in the past two hours, losing $512K (-2.7%).”

AMBCrypto also assessed the selling pressure on centralized exchanges to predict LINK’s potential trajectory.

Although selling pressure appeared stable, there was an increase in the days leading up to the unlock. Exchange reserves rose slightly, from 30.8 million tokens to 31 million, indicating augmented sell pressure.

Furthermore, derivatives exchange reserves spiked, suggesting heightened volatility and possible liquidation risks due to excessive leverage.

From a technical viewpoint, LINK has rebounded from its range lows within a descending channel. If this upward trend continues, it may reach the midpoint range of $16-$17. However, ongoing selling pressure could push the altcoin down to levels around $10, as seen in November during the U.S. elections.