$1 billion wiped from AVAX in a day amid massive token unlock
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$1 billion wiped from AVAX in a day amid massive token unlock
$1 billion wiped from AVAX in a day amid massive token unlock
Vinicius Barbosa
Vinicius Barbosa
CRYPTOCURRENCY
Feb 21, 2024
Avalanche (AVAX) has seen nearly $1 billion worth of value vanishing from its market cap on February 21. This happened in anticipation of Avalanche’s awaited token unlock and sell-offs, as reported by Finbold on February 17.
In particular, Avalanche currently has a $13.52 million market cap against the $14,42 billion capitalization 24 hours ago.
Meanwhile, the token trades at $36.77, with a 367.716 million AVAX circulating supply. In a few hours from the time of writing, vesting contracts will increase this supply by 9.54 million AVAX. Therefore, this creates massive selling pressure worth over $365 million.
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Interestingly, the current losses may be due to the cryptocurrency market trying to price the expected sell-off. Frontrunning the entities that will benefit from the token’s inflation.
Avalanche (AVAX) market data and daily market cap chart. Source: CoinMarketCap
AVAX token unlock and distribution
Notably, Avalanche’s last unlock happened on August 26, 2023, with a massive impact on the price of AVAX. By then, one token was priced at $10.60, approximately 3.5 times lower than its current rate.
Regarding distribution, the team is set to receive 47% of the allocations for this year. Starting February 22, team members will have access to liquidate 4.50 million AVAX, valued at approximately $177.62 million.
Moreover, both ‘Strategic Partners’ and the ‘Foundation’ will see their treasuries grow by an addition of 2.25 million and 1.67 million AVAX, respectively. This scenario poses a potential risk of a sell-off exceeding $154.6 million by these parties.
However, the highest liquidity unlock involves 1.13 million AVAX ($44.40 million) designated for a community airdrop. This is due to retail having a less-strategic selling behavior.
February 21 AVAX unlock distribution. Source: TokenUnlocksApp
In conclusion, Avalanche investors and cryptocurrency traders must speculate with caution in the following days. Cryptocurrencies are volatile and unpredictable, moved by whales and market makers looking for the highest possible profits.
Such a massive token unlock could fuel the already happening sell-off, further impacting AVAX’s short-term prices.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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Vinicius Barbosa
Vinicius Barbosa
CRYPTOCURRENCY
Feb 21, 2024
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WARNING: The content on this site should not be considered investment advice. Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site.
AMBCrypto
AMBCrypto
ALTCOIN9.5M AVAX tokens ready for unlock – Gauging the effect on prices
If historical price action is anything to go by, investors will likely interpret the unlock as a bullish catalyst.
Published 3 days ago on February 19, 2024By Aniket Verma Edited By: Saman Waris
The unlock amount represented 2.6% of AVAX’s total circulating supply.
AVAX whales have been steadily stockpiling in recent weeks.
Avalanche [AVAX], the ninth-largest cryptocurrency, was gearing up for its upcoming token unlock. Analyses and projections about the coin’s behavior following the crucial event have picked up pace.
Bullish or bearish?
As per AMBCrypto’s scrutiny of Token Unlocks’ data, about 9.54 million AVAX tokens, or 2.6% of the total supply, would be pushed into circulation on the 22nd of February.
Token unlocks mean a staggered unfreezing of a fixed number of tokens at predetermined time intervals. These events have become a source of great interest in the market in recent years.
The dominant belief is that the price of the asset in question would go down as the market gets flooded with extra supply.
However, this wasn’t the case in the aftermath of the last unlock event on the 24th of November last year. In fact, there was no downward pressure at all, AMBCrypto’s examination of AVAX’s price chart revealed.
The crypto asset rose 5% in the first week after the unlock, and nearly 44% in two weeks. As of this writing, AVAX was exchanging hands at $40.2, having doubled from the unlock day.
