Chainlink has been in the spotlight since Google announced that it was integrating it into its cloud-based services, further surging after Coinbase Pro and Coinbase revealed listing. In a matter of sixteen days LINK’s value rose 320 percent from $1.11 to $4.64, and now on-chain transactions suggest that the company is getting ready to profit from the surge.
Chainlink on the rise
On June 13, Allen Day, a Google Cloud developer advocate, described in a blog post how Chainlink could be used to make BigQuery data available inside an Ethereum smart contract. The integration would allow developers to reduce many inefficiencies encountered when building hybrid applications such as blockchain platform risks, masking transactions, and settlements on prediction marketplaces like Augur.
Shortly after the blog post was published, Chainlink’s LINK token skyrocketed 77.42 percent within 60 minutes even though there was no announcement of an official partnership between the two companies.
A similar effect was seen on June 26 when Coinbase Pro disclosed that it will be listing this altcoin on its platform, taking it up 23.30 percent within a few hours, and on June 28, when Coinbase also added the coin, taking LINK up another 104.49 percent within 24 hours.
The entire upswing that LINK experienced over the last month since Google’s blog post totals 320 percent. It has been so significant that it appears the company is preparing to sell a large chunk of the tokens it holds and has yet to communicate the transaction with the community.
Cash out while demand is high
Based on transactions from Chainlink’s “development wallet,” 1.4 million LINK tokens were transferred into Binance. The transactions indicate the team is selling its initial token allocation, which would increase the circulating supply of LINK by 0.4 percent.
CryptoSlate reached out to Chainlink for clarity on the token movement and has yet to receive a response.
The whitepaper outlines the following token allocation: 350 million sold during the ICO, 350 million to incentivize node operators and 300 million distributed to the company for a total of 1 billion tokens. At current prices, this would mean that Chainlink’s reserves would be worth $1 billion.
Commentators believe the sale was justified. The whitepaper details that 30 percent of Chainlink’s funds are meant for the project’s future development. The firm could be liquidating some of their holdings to cover expansion costs and operating expenses.
Regardless of the 1.4 million LINK tokens, several technical indicators also suggest the cryptocurrency could experience a major correction.
LINK technical analysis
On both the 1-week chart and the 3-day chart, the TD Sequential Indicator shows a green nine candlestick, which is a sell signal forecasting a pullback that could last for 1 to 4 weeks before the continuation of the bullish trend. The probabilities a bearish outlook are high due to the fact that the same signal has been given in two different time frames.
Therefore, a move below the 38.2 Fibonacci retracement level that sits around $3 on the 3-day chart could take LINK’s price down to the 50 or 61.8 percent Fibonacci retracement level, which is at $2.5 and $1.9 respectively.
The 50 to 61.8 percent Fibonacci retracement zone will be a very important area to watch out because this is where the 7-week moving average is on the 1-week chart and based on this longer-term perspective breaking below it could take this cryptocurrency down to around $1 where 30 and 50-week moving average is.
Nonetheless, the sell signals will be invalidated if LINK is able to trade above the recent high of $4.8, which will have the potential to take it to higher highs allowing the bull trend to continue.
July 5, 19:50 PST: Title revised to better reflect the content, non-reputable quote removed.Posted In: U.S., Altcoins, Analysis, Price Watch, Technical Analysis