On-chain Activity On Chainlink Increases Sharply

Following the announcement of the LINK staking improvement, on-chain data on Chainlink shows an increase in activities.

Chainlink just announced the first part of “Chainlink Economics 2.0”. The announcement explains the improvements to the current LINK staking mechanism. The planned roadmap includes new staking features such as staking and redistribution, user fee rewards, node authorization, reputation tracking, and more.

This positive news comes at a great time as the bear market treats LINK similarly to most other cryptocurrencies, driving the price down 65% since the start of the year. Since the price of LINK stabilized last month, large holders on Chainlink (those holding at least 0.1% of the circulating supply) have taken advantage to continue accumulating more.

Following the release of the staking news, more than 3.39 million LINKs were absorbed by these whales, which is more than $28 million at current prices.

The interest in Chainlink from major holders not only increased significantly, but the number of daily transactions using LINK also jumped 129% from an average of 2500 daily transactions to over 3200 on June 8. Transaction execution location prevails in the western time zone, analyzed by calculating the date of each transaction and categorizing the time zones of the eastern and western hemispheres.

Regarding potential support and resistance levels, an on-chain indicator should be considered rather than technical analysis signals. Traders can identify these support and resistance levels from the In/Out of the Money Around Price (IOMAP).

This indicator is limited to a 15% range of the current price in both directions. That way, IOMAP identifies key buying and selling areas that can act as support and resistance.

As can be seen from the chart above, most of the LINK supply (85.6%) within 15% difference from the current price was bought lower and only 14.2% bought higher.

This could signal that selling pressure is mitigated in the event of a rise in prices as most of the supply is bought below and will continue to be profitable. According to behavioral economics, traders are willing to let their positions work when profitable.

In the long term, LINK has a holding distribution model similar to BTC or ETH cryptocurrencies. It is worth mentioning that those assets are mainly seen by investors as stores of value.

This is shown by the number of addresses held for more than a year, which currently represents the largest group of holders. Observe the chart below, they are classified as Hodlers, while those holding from 1 to 12 months are called Cruisers, and those holding less than one month are Traders.

Looking at the number of addresses by holding time, there are 65% of addresses holding LINK for more than a year. This shows the long-term trust most holders have in the Chainlink ecosystem.

Staking news, on the other hand, lays out the plan for the long term. So it will take time to implement and start seeing results in the second half of 2022 but will continue to expand the capabilities as planned possibly beyond 2022. It will be interesting to see what happens to progressive development and how the LINK price reacts to it.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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