Similar to Bitcoin, Ethereum, Dogecoin, Chainlink (LINK) stands as one of the most coveted and notable cryptocurrencies that ride high on success. This cryptocurrency is well known for its seamless decentralized oracle network and has revolutionized the crypto world, sparking the interest of crypto investors and fanatics alike to invest in it.
However, unfortunately, LINK’s trading volume has dropped gradually in recent years, calling its prospects into question. With this in mind, we fundamentally factor in the depreciation of Chainlink’s volume and the critical factors that impact its price stability.
Understanding Chainlink’s Recent Volume Drop
For those unfamiliar with trading volume, traders utilize the total number of crypto coins in a specific period. It is considered a key benchmark in cryptocurrencies due to its ability to showcase liquidity and interest precisely in a cryptocurrency. Taking higher trading volume into account, it indicates enhanced market activity and a stable and well-being ecosystem. On the other hand, lower volume connotes slumping interest of investors in a digital asset.
In recent years, there has been a critical slump in the volume of Chainlink (LINK). It is worth noting that LINK’s trading volume reached its highest point in the middle of 2021, but after that, it dropped gradually, dissuading investors from investing in it.
The slump in Chainlink’s lower volume is due to various key reasons. First, the wide market correction accounts for toning down speculative trading. Next, providing a potential LINK token unlock urged most investors to assume a conservative mindset. However, there is a possibility that a surfeit of tokens will arrive in the market, which investors or traders are still hesitant to invest in. Considering this, most investors adhere to the “wait-and-see” approach, ensuring their benefits.
Chainlink’s Token Unlock
A total of 18.75 million $LINK (equivalent to $117 million) was released from four Chainlink non-circulating supply contracts a few hours ago. Off this, 15.7 million $LINK ($98 million) found its way to Binance, while 3.05 million $LINK ($19 million) remains stored in multi-sig address 0xD50f.
Worth noting is that since August 2022, a substantial 82.75 million $LINK has been unlocked, with 71.8 million $LINK later being transferred to Binance. Despite these significant unlocks, the price of $LINK has displayed remarkable stability.
Market Sentiment and Community Reactions
The trading volume drop and the observable fact of token unlock impacted the crypto community mightily, getting a variety of reactions from its members. Simply put, from the perspectives of some investors, the would-be impact on Chainlink’s price is a matter of deep concern, while others consider it a promising opportunity to be maximized by amassing as many tokens as possible at a lower price.
When it comes to Chainlink’s future performance, there have been a lot of discussions in the crypto community. Based on our Chainlink predictions, the token is expected to close the year at around $12.88 for the year 2023. In 2025, the token can cross the $15 mark, and in 2030, it can reach $40.
Crypto analysts watch whether there will be lower trading volume in Chainlink gauge and token unlocking that will lower its price even more or whether the cryptocurrency will emerge like thunder by maintaining its price volume in the cut-throat market scenario.
Lessons for Investors
Any Chainlink investor planning to invest in this cryptocurrency should be patient and cautious while the token unlock event and low trading volume prevail. In general, investors should consider a few salient factors as follows:
Diversify Your Portfolio: Since cryptocurrencies are subject to price swings, never invest in a single cryptocurrency arbitrarily, or it will cause you to incur a crucial loss. The wise idea is to diversify your investments across various cryptocurrencies so that you can stand better odds of profitability.
Risk Management: Implement a clear-cut risk management approach to ensure maximum odds of profits. Investors can set stop-loss orders to keep losses at bay and gain profits when their investment meets their desired objectives.
Steer clear of FOMO (Fear of Missing Out): Avoid being overwhelmed by emotions or market hype that urges you to decide at random. The wise idea is to research and analyze first and then decide accordingly.
Long-Term Potential: Do factor in the long-term potential of the project. If a project appears to be short-term, then the odds of price swings in the crypto market will be common. In short, consider investing in a long-term potential.
Consult Experts: If you cannot make a clued-up investment decision, the wise idea is to get in touch with crypto experts (possessing substantial knowledge of the market) who will run the extra mile to help you best.
The recent diminution of Chainlink (LINK) in trading volume and unlocking the number of tokens have dissuaded crypto community members from investing it further. These phenomena have the odds of bringing about short-term price swings; therefore, investors and fanatics should consider paying attention to the project with long-term potential.
While volatility is an integral part of every cryptocurrency, doing extensive research and considering a long-term perspective will work wonders for investors in gaining profits most of the time. As Chainlink’s ecosystem evolves, keeping a watchful eye on its developments and market sentiment remains crucial for making informed investment decisions.