Chainlink [$LINK] has traded within a strong downtrend. Since the uptrend collapsed at $8.5, the altcoin has been closing at lower lows, reaching a low of $7.7.
As of this writing, Chainlink traded at $7.9, up 1.4% on the daily charts. Despite the extended market weakness, the Chainlink team unlocked its quarterly unlocks, capturing market attention.
Chainlink moves $166 million worth of $LINK
On the 20th of June, Chainlink’s quarterly unlock occurred, and 21 million $LINK worth $166 million were transferred from non-circulating supply addresses.
After the unlock, these addresses deposited 18.375 million $LINK, worth $144.93 million, into Binance, according to Arkham. Typically, Chainlink’s unlocked tokens are released as part of the project’s token distribution schedule.
These tokens are moved for three major reasons. Firstly, the unlocked tokens are transferred to exchanges to provide liquidity.
Secondly, the project sells a portion to fund operations and other activities. Finally, tokens may be transferred to reward operators and support staking programs.
In fact, of the remaining tokens, 2.62 million $LINK, worth $20 million, were transferred to a multisig wallet. These funds are used to distribute rewards to $LINK staking users.
It’s worth noting that these tokens were neither sold nor issued as inflation; however, such transfers attract market attention.
Despite that, exchange activity also recorded these transfers. According to CryptoQuant data, Exchange Netflow jumped to 10.3 million.
A jump in NetFlow implied that more $LINK entered exchanges. Many market participants perceive such a surge as bearish.
Why is $LINK struggling
Although Unlocks transfers impact on the market remains neutral, $LINK continues to struggle on its price charts. Among many other reasons, especially broader weakness in crypto, it seems demand for Spot ETFs has completely dried up.
Sosovalue data showed that $LINK Spot Net Inflows have remained zero for nine consecutive days. Zero inflows suggest weak demand from institutional investors.
The weakened demand has further strengthened market momentum. In fact, the Momentum Shift indicator has remained negative for two consecutive weeks.
A prolonged stay within the negative zone suggests that the downward momentum is relatively strong. At the same time, Chainlink has remained below the MACD SMA, further validating this bearishness.
Taken together, these indicators point to extended market weakness. If the demand remains weak, the altcoin could drop to $7.4.
For a significant trend reversal, especially in the short term, the altcoin needs to flip $8 and close above $8.3.
Final Summary
- Chainlink unlocked 21 million $LINK worth $166 million and deposited 18.375 million $LINK, worth $144.93 million, into Binance.
- $LINK is experiencing a strong downtrend as demand from institutional investors dried up.
