While most altcoins look forward to a recovery from the recent market crash, AVAX price appears to be gearing up for the opposite. The reason behind this is the massive token unlock that will take place this week, which will no doubt put more selling pressure on the already struggling price of the digital asset.
$102 million worth of AVAX set to be unlocked
The Avalanche network, like many others, has locked some of its total token supply into circulation periodically. Since these unlock events can put bearish pressure on a token, they can often be a signal to stop.
For AVAX, the next token unlock event will take place on August 26, five days from now. But the most interesting thing about this event is the amount of tokens that will be put into circulation. According to the token tracking website Token unlocks, a total of 9.54 million tokens will be unlocked on Saturday. This accounts for 2.77% of the total circulating supply of the asset, worth $102.29 million at current prices.
2.77% of token supply set to be unlocked | Source: Token Unlocks
The website also reveals that the unlocked tokens will be divided into four allocations. These include 1.13 million tokens ($12.06 million) for airdrop, 1.67 million tokens (17.87 million) for Foundation, 2.25 million tokens ($24.12 million) for strategic partners and 4.5 million tokens ($48.24 million) for the team.
This unlock unlocks more than 55% of the total token supply, leaving less than 45% of the supply locked. And as these 9.54 million tokens make their way to the market, it could be very bad for investors.
Will the price of AVAX be affected?
Given the allocation of the $102 million in tokens that will be unlocked, it is likely that a large portion of it will reach the open market. As a result of such a large amount of sales, the AVAX price is bound to be affected, making an already bad situation even worse.
This will likely push the price of the digital asset below $10 for the first time since July 2021. Trading the single-digit will see AVAX holders plunge further into losses, though the vast majority are already in the red, according to data from IntoTheBlock.
AVAX’s indicators are also incredibly bearish right now, with price trading below the 100-day and 200-day simple moving averages. This rules out a near-term recovery for the digital asset, especially with the unlock event coming up.
At the time of writing, the AVAX price tentatively stands at $10.56, down 13.15% over the past week.
Avalanche price crashes to $10.5 | Source: AVAXUSD on Tradingview.com