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Chainlink has rolled outs its much-anticipated airdrop, with distribution based on on-chain activity.
Up to $20 million has been allocated for the airdrop, which is available for qualified L2 Ethereum users.
LINK price has succumbed to selling pressure, falling 5% as airdrop holders look to dump

Chainlink (LINK) has lost all of the ground gained during the August 29 rally, which was spurred by the Grayscale fund manager's overwhelming victory in its long-running dispute against the US Securities and Exchange Commission (SEC).

Chainlink's price falls when a $20 million airdrop begins

Chainlink (LINK) has lost nearly 5% of its value since the $6.318 intra-day high on Tuesday. The network's $20 million airdrop is to blame for the drop, which has prompted a sell-off among airdrop token holders.

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The airdrop is only available to Ethereum Layer-2 (L2) users that match the criteria. It is a way for the network to thank the LINK community while also incentivizing network involvement.

Chainlink has established itself as one of the go-to networks for DeFi developers and projects. Its popularity stems from its unique ability to connect smart contracts to off-chain data sources. The airdrop is timed to coincide with the market's need for volatility. With traders looking for actionable price changes for a quick profit in a sluggish market, the sell-off creates an opportunity for futures traders.

According to IntoTheBlock data, inflows into exchanges have been steadily increasing since August 26, indicating a desire to sell as investors attempted to avoid a value decrease.

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Forecast for LINK price under growing selling pressure

At the time of writing, Chainlink is trading at $5.907 while it determines its next move. Momentum indicators such as the Relative Strength Index (RSI) and the Awesome Oscillator favor the downside, implying that LINK might continue to fall, perhaps breaching the $5.808 support level before entering the demand zone at $5.407.

Chainlink pricing may bounce from this order block if a demand zone is marked by vigorous buying. If it does not hold as a support level, the altcoin may fall below the support floor at $5.020.

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In contrast, investors using the collapse to buy the dip could propel Chainlink price higher, possibly breaking over the $6.609 barrier and testing the supply zone at $7.103. LINK could also correct in this area, which is rife with aggressive sellers. provided it fails to hold as a resistance level, an extension north could be assured, provided a decisive daily candlestick close over $7.637 is achieved.

In an extremely bullish scenario, Chainlink prices might rise to the $8.144 supply congestion zone, which was last witnessed in late July. This would imply a 5% rise versus what would then be a bullish breaker.

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