- Recent downturns in Bitcoin have impacted the altcoin market, including ARB coin, with further declines expected over the next 2.5 months. This is attributed to the unlocking of approximately $2 billion worth of tokens over the next 10 weeks, which could create selling pressure in the market.
- According to a report published by crypto analysis and research firm 10x Research on May 8, token unlocks will occur in popular altcoin projects such as Aptos (APT), Starknet (STRK), Arbitrum (ARB), Immutable X (IMX), Avalanche (AVAX), Optimism (OP), PRIME, Sui (SUI), Ethena (ENA), Altlayer (ALT), and XAI.
- This could create significant selling pressure on altcoin prices. Venture capitalists could limit the upward momentum in cases of token unlocks and pull down the price. The altcoin market faces the following dangers: increased supply, selling pressure, and volatility.
Over the next 10 weeks, the crypto market could face selling pressure due to the unlocking of approximately $2 billion worth of tokens in popular altcoin projects. This development could impact altcoin prices and increase market volatility.
Token Unlocks in Popular Altcoin Projects
10x Research, a crypto analysis and research firm, published a report on May 8 detailing the upcoming token unlocks in popular altcoin projects. These include Aptos (APT), Starknet (STRK), Arbitrum (ARB), Immutable X (IMX), Avalanche (AVAX), Optimism (OP), PRIME, Sui (SUI), Ethena (ENA), Altlayer (ALT), and XAI. The unlocking of these tokens could introduce a significant amount of new supply into the market, potentially driving down the value of existing tokens.
Potential Impact on Altcoin Prices
The influx of new tokens into the market could create significant selling pressure on altcoin prices. Venture capitalists, who typically hold large amounts of these tokens, may choose to sell their holdings once the tokens are unlocked. This could limit the upward momentum of altcoin prices and even drive them down. The increased supply and selling pressure could also lead to greater volatility in the altcoin market.
Understanding Token Unlocks
Token unlocks refer to events where investors or project teams gain access to tokens that have been locked for a certain period. These tokens are usually given to investors or the team during the start of a project or a funding round and are locked for a certain period. This rewards investors who demonstrate faith in the project and adopt a long-term holding strategy. However, the crypto market always carries a high risk and high return potential.
Conclusion
Token unlocks can introduce a large amount of new token supply into the market, creating significant selling pressure on altcoin prices. This, especially in a weak market, can lead to significant price declines. It’s important to consider these risks and conduct thorough research before investing. By following token unlock schedules, you can see when and how much of a particular altcoin’s tokens will be unlocked, enabling you to make more informed investment decisions.
