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Highlights
- Major token unlocks expected in the coming six months.
- Token unlocks could trigger sharp price declines.
- Altcoin market under pressure from supply surges.
Several major token unlocks are set to take place in the coming months, which could potentially de-stabilizing the altcoin market. These unlocks will introduce large amounts of new supply, and as a result, investors are bracing for possible price crashes this month.
Historically, sharp increases in supply without matching demand often lead to market volatility. These unlocks will affect major coins like $JTO, $TIA, and $ONDO. This raises concerns about price declines and market instability.
Upcoming Token Unlocks
- $TIA will unlock 175 million tokens, a 390% increase in its circulating supply. According to Cryptorank data, the unlock comes at a time when the coin is already down 79.8% from its ATH. The upcoming unlock might increase the risk of further price drops.
- $JTO will experience a 166% supply increase over the next six months, with a major unlock of 135.72 million tokens expecting on December 7. The supply expansion, largely allocated to core contributors and investors, is expected to create selling pressure.
- $ONDO developers are set to release $1.14 billion worth of tokens by January 18, increasing its total supply by 134%. Developers will use the majority of these tokens for ecosystem development, though some are reserved for investors.
- $ZETA will unlock 53.89 million tokens in September. The unlock will contribute to a total supply increase of 357.94 million tokens by March 2025. Moreover, investors are raising concerns about long-term price stability due to this constant stream of supply.
- $PORTAL will see a 115% supply increase over the next six months, with 25.61 million tokens scheduled for release on September 29. The company will distribute these tokens to private and public investors
- $STG will increase its supply by 42% in the next six months, with gradual unlocks given to team members and early investors. This steady release could trigger moderate price fluctuations.
- $WLD, originally slated for a four-year unlock, will now spread its unlocks over five years. The first unlock started on July 24, 2024 and a 37.5% increase in the circulating supply is expected in the next 30 days which will primarily benefit community members and investors.
Potential Market Crash Risk
Over the next six months, a significant volume of token unlocks could trigger substantial price drops. When new supply exceeds demand, prices usually fall, especially if investors promptly sell their unlocked tokens. Historically, large unlocks have caused downward trends in altcoin prices and with many token unlocks scheduled for early September, they may affect market dynamics.
Previous large token unlocks often cause major price fluctuations and increase market volatility. For example, according to data from CoinCarp, $dYdX dropped 61% after its 2.12 million coin unlock in May. Similarly, $PYTH fell by 55%, and $AVAX declined by 66%.
By December, over $750 million worth of coins will be unlocked. Thus, investors aiming to recoup their funds will increase selling pressure. This surge will likely lead to significant fluctuations in the altcoin market.
Tools like the Altcoin Season Index can assist in tracking market movements, hence helping investors make informed decisions. Additionally, understanding the timing and magnitude of these unlocks is essential for navigating periods of volatility.
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