The recent release of 21 million Chainlink tokens, valued at $295 million, has sparked interest in the cryptocurrency market. This significant increase in the token supply has led to speculation about its potential impact on the price of LINK, Chainlink's native token. To comprehend the situation, it's crucial to examine the details of the token release and the current market conditions.

Chainlink, a decentralized oracle network, has distributed the newly released tokens to various destinations. Notably, 18.25 million tokens were transferred to Binance, a prominent cryptocurrency exchange platform. This move suggests that the tokens might be prepared for sale, potentially influencing the market. Another 2.25 million tokens, valued at $31.30 million, were sent to Chainlink's multi-sig wallet, indicating that they might not be sold immediately.

The transfer of tokens to Binance has raised questions about the potential effects on the market. Historically, when a large number of tokens is released, the asset's value may experience a decline. However, it's important to consider the current market conditions and the velocity of tokens in circulation. According to Glassnode, the velocity of LINK tokens has been increasing since June 20, indicating a higher frequency of transactions. This rise in velocity may lead to price volatility, and a decline below $13 is possible.

To better understand the potential impact on LINK's price, it's essential to analyze the market's support and resistance levels. The In/Out of Money At Price (IOMAP) metric provides valuable insights into these levels. According to IntoTheBlock, 12,090 addresses purchased 5.84 million LINK tokens at an average price of $13.40, and these investors are currently in profit. On the other hand, 14,140 addresses bought 11.62 million tokens at $13.90, but these investors are incurring losses. The higher number of addresses at the $13.90 level suggests that LINK might face resistance in rising to $14.

The potential decline in LINK's price is further supported by the possibility that some holders in loss might choose to break even if the token reaches $13.90. If this occurs, the price of LINK could drop to $12.95 in the short term. It's important to note that the cryptocurrency market is highly volatile, and prices can fluctuate rapidly.

In conclusion, the release of 21 million Chainlink tokens has introduced a new dynamic to the market. While the transfer of tokens to Binance suggests potential market effects, the current market conditions and velocity of tokens in circulation also play a crucial role in determining the price of LINK. As the situation unfolds, it's essential for investors and traders to remain vigilant and adapt their strategies accordingly..