In February, the cryptocurrency market should see the release of nearly $900 million worth of vested tokens from projects, including Avalanche (AVAX), Aptos (APT), The Sandbox (SAND), Optimism (OP), and SUI.
Avalanche is at the forefront with a planned release on February 22 of 9.5 million tokens valued at approximately $320 million, aimed at strategic partners and team members, and an airdrop to balance long-term commitment against short-term sell-offs.
Similarly, Aptos plans to release 24.8 million tokens, valued at about $233 million, on February 11. Aptos’ distribution strategy is designed to ensure market stability and enhance community involvement.
The release of nearly $900 million in vested tokens into the cryptocurrency market has sparked concerns about price drops. The principle of tokenomics indicates that a sudden boost in supply might cause volatility.
Investors and analysts scrutinize these developments closely, considering their potential impact on the market. Despite excitement over the token releases, the crypto community is adopting a wary stance. It is evaluating how the surge in supply might affect the valuation of projects and the market’s overall stability. The projects’ strategic distribution of these tokens needs to minimize negative market repercussions.
On November 23, the same amount of AVAX tokens were unlocked.
At the time, those tokens were distributed to the team and strategic partners, as well as being allocated for the airdrop and staking. This was the same as the next unlock, which is why we can draw comparisons.
Now, with all things considered, let’s examine the AVAX chart.
When AVAX’s price broke through its bear market descending trendline on November 1, it triggered a 470% increase. The price climbed from a low of $9 on October 19 to a peak of $51 on December 24.
Our prior analyses of AVAX hinted at a possible downtrend as a correction phase. This outlook remains valid despite a recent upward surge. If the price rises above $41, the likelihood of Avalanche reaching new highs increases.
However, AVAX faces resistance at a descending trendline from the December high. This could lead to a price rejection and a potential decrease.
If this marks the beginning of a lasting bull phase for Avalanche, we may witness a correction. It should have a support level of around $20, aligning with the 0.5 to 0.618 Fibonacci retracement levels.
Once this correction phase ends, AVAX could start a new uptrend, potentially exceeding its all-time high.
After its previous unlock on November 23, the price of AVAX remained stable. However, in the run up to the unlock anticipation, the price fell 16% from nearly $23 on November 20 to $19 at the tokens’ release. In conclusion, with this correlation in mind, and with what the chart analysis points out, we can anticipate AVAX will fall in February.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.