As a seasoned crypto investor with battle-tested nerves and a knapsack full of lessons learned from past bear markets and bull runs, I find myself standing at a critical juncture as we approach the impending token unlocks and the upcoming US Presidential elections. The volatile altcoin market is reminiscent of a roller coaster ride, with its peaks and troughs leaving me both exhilarated and apprehensive.
This week, there’s a significant amount of volatility seen in the altcoin market due to over $500 million worth of token releases. As a result of this massive unlocking, there could be a noticeable decrease in the prices of these tokens, given that so much value is becoming available for teams, investors, and advisors within the ecosystem.
According to TokenUnlocks, approximately $80 million worth of Worldcoin’s WLD, $51 million in Arbitrum’s ARB, nearly $40 million each for Eigenlayer’s EIGEN and Axie Infinity’s AXS will be distributed over the next seven days. The current values for these cryptocurrencies are as follows:
The launch of Worldcoin’s (WLD) token will boost its total circulating amount by 7%. Afterward, these tokens will be allocated among Worldcoin investors, staff members, and advisors. At first, the WLD tokens given to early contributors followed a three-year distribution plan. But in July, this lock-up period was extended to last for five years instead.
Additionally, the Layer 2 network Taiko anticipates a 15% increase in its supply due to an upcoming release of over $18 million worth of tokens. Out of the total $500 million worth of tokens set to be released, approximately $200 million will be distributed all at once, a phenomenon known as a “cliff.” Here’s a list of various altcoins and their respective token unlocking values:
- $ARB (2.56%) – $48.97 million.
$EIGEN (6.01%) – $41.40 million.
$AXS (6.08%) – $41.55 million.
$STRK (3.30%) – $25.00 million.
$TAIKO (15.00%) – $18.24 million.
$APE (2.31%) – $10.86 million.
$PIXEL (7.05%) – $6.80 million.
In addition to those altcoins, significant amounts like $80 million of Solana’s SOL are scheduled for release under their “linear” strategy. This strategy involves both issuing and reabsorbing tokens based on market conditions.
As an analyst, I can explain that unlocking tokens increases the overall supply of a particular token. However, it doesn’t necessarily imply that these newly accessible tokens will instantly flood the market. The anticipation among investors and traders that token recipients might sell their freshly unlocked tokens could lead to a precautionary sell-off, which in turn may cause the token price to drop before or during the unlock event, thereby potentially lowering its value.
US Presidential Elections to Trigger Altcoin Season
In the midst of Bitcoin‘s price fluctuations after its rise in September, the market for alternative cryptocurrencies (altcoins) has faced selling pressure, contradicting the hopes for an ‘Uptober’ rally. Analysts are now studying past market patterns to foresee if there might be a surge in altcoin popularity by year-end, commonly known as an “altcoin season.
CRG’s examination suggests that the present stage of Bitcoin is similar to the tail end of the 2020 cycle. He pointed out that usually, over 100 weeks after Bitcoin experiences its lowest point, it typically reaches a new high, which is often followed by an upsurge in altcoins approximately a week later.
According to a recent report by CoinShares, for the seventeenth week in a row, multi-asset investment products saw inflows, although these were relatively small at approximately $1.5 million. On the other hand, Ethereum followed its pattern of withdrawals, with outflows totaling around $9.8 million during that period.
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2024-10-14 14:06