Home / Analysis / Crypto / Technical Analysis / XAI, IMX and APT Brace For $200M In Token Unlocks in July – How Will Their Prices React?

XAI, IMX and APT Brace For $200M In Token Unlocks in July – How Will Their Prices React?

Last Updated July 3, 2024 11:36 AM
Valdrin Tahiri
Last Updated July 3, 2024 11:36 AM
Key Takeaways
  • XAI, IMX and APT face token unlocks between July 9 and 12.
  • Relative to its circulating supply, XAI faces the biggest unlock.
  • How will the asset prices react to this increase in supply?

Token unlocks increase the circulating supply of an asset, and in turn can have a negative effect on the price, especially if the unlock is significant relative to the circulating supply. We have previously analyzed that token unlocks of less than 3% of the total supply have no discernible effect on the price

Between July 9 and 12, XAI, IMX and APT will see token unlocks of various sizes. will these token unlocks lead to a decline in their prices, or will the market absorb the increased supply without any issue?

How Big Are the Upcoming Token Unlocks?

July brings numerous token unlocks. The biggest in total amount is AltLayer, a July 26 unlock of nearly 700 million tokens worth over $127 million. However, the biggest by circulating supply is XAI, whose unlock is 72% of the circulating supply.

Other smaller unlocks happening next week are on IMX and APT. Both are between 2 and 3% of their total circulating supply. .

So far, DYDX, SUI and IO have already had token unlocks on July 1. IO had the largest one of the three at 7% of the circulating supply. In turn, the IO price fell the hardest out of the three, decreasing by 9% on the day.

It is also worth mentioning that the Total Crypto Market Cap (TOTALCAP) actually increased by 0.15% the same day. So, the IO decline was likely as a result of the token unlock rather than correlation to a crypto market decline.

With that in mind, let’s examine each token unlock to predict their potential impact on asset prices.

XAI’s Supply Increases by Over 70%

XAI has a circulating supply of 277 million and a maximum supply of 2.5 billion. So, roughly 11% of the maximum supply is circulating. On July 9, this will increase by another 198 million tokens, increasing the circulating supply by 71%.

XAI faces a cliff unlock, meaning that it is a lump sum event rather than a continuous one. After it is done, a gradual vesting schedule  will continue until July 2027. An interesting characteristic of the unlock is that 88% of it will go to the team and to investors.

Xai Vesting Schedule
XAI Vesting Schedule | Credit: Token.Unlocks

The two private rounds and the Binance Launchpool  sold XAI tokens at prices between $0.02 and $0.035. So, at the current price, investors have a more than 10x return on their investment. This could possibly create selling pressure if they decide to take the profits.

XAI Breaks Down From Support

To add to this negative sentiment, the XAI price action is still bearish. While the price increased after launch, reaching a new all-time high of $1.63 on March 11, it has fallen since, declining by 78%.

During the decline, XAI broke down below the $0.60 horizontal support area which had stood for The XAI price today culminated with a low of $0.36. Excluding the price at the day of the launch, this is a new all-time low price.

Technical indicators do not show any bullish signs. Both the MACD and RSI are falling, with the former being in negative territory while the latter being below 50. Even though the RSI is in oversold territory, it broke its previous bullish divergence trend line and has not generated a new bullish divergence (green). The same holds true of the MACD.

XAI Price Movement
XAI/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

Furthermore, the wave count implies XAI is falling in an A-B-C corrective structure. Giving wave C 0.618 times the length of wave A leads to a low of $0.296, making it a likely place for a temporary bottom.

This bearish XAI price prediction will be nullified if the price moves above the $0.60 horizontal area and then breaks out from the resistance trend line, currently at $0.70. As of right now, there are no signs this will happen.

APT & IMX Face Smaller Token Unlocks

IMX and APT face smaller token unlocks on July 12, at 2.03 and 2.49% of the circulating supply, respectively. Unlike the XAI cliff unlock, these are both part of monthly linear vesting schedules that will continue for between 35 and 120 months. IMX faced an unlock with a similar magnitude on May 17, which did not have a discernible effect on the price. Rather, IMX created a small bullish candlestick on the day.

Moreover, unlike the XAI unlock, the IMX unlock  will go to ecosystem and project development, making it less likely to cause selling pressure. A portion of the APT unlock  will go to investors, but it is a much smaller portion compared to XAI.

The price chart for IMX is also more mixed. The price has fallen under a descending resistance trend line since its yearly high in March and broke down from the $1.80 horizontal support area  in June. It has yet to reach the closest Fibonacci support at $1.18.

However, both the MACD and RSI have generated bullish divergences, the former in the long-term while the latter in the short-term. As a result, while it is possible that IMX will drop once more to complete the correction at $1.18, it is likely the bottom is close.

IMX Price Decline
IMX/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

A similar chart exists for APT, whose price has fallen under a descending resistance trend line since the yearly high in March. While doing so, APT broke down from the $8.20 horizontal resistance area. However, it then bounced at the $6.70 support area on June 24 (green icon), and broke out from the trend line the next day. Despite the breakout, it has yet to initiate an upward movement.

The MACD and RSI both give mixed readings. While the indicators trend upward, neither has generated any bullish divergence. Also, both are below their bullish thresholds at 0 and 50, respectively.

Aptos Movement
APT/USDT Daily Chart | Credit: Valdrin Tahiri/TradingView

As a result, whether the price breaks down from the $6.70 support area or bounces will likely determine the future trend’s direction.

July Token Unlocks Add to Negative Sentiment

All three of APT, IMX and XAI face token unlocks in July. XAI has the largest token unlock and the most bearish price action, making it likely to continue falling. On the other hand, both APT and IMX have shown signs of strength, which albeit have not been sufficient to trigger a reversal.

Disclaimer
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.
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