Altcoin Rally Cools as Massive $650 Million Worth of Token Unlocks Loom in the Crypto Market
The prices of several major alternative cryptos, including native tokens of dYdX(DYDX), Sui(SUI) and Optimism(OP), all fell on Monday due to massive token unlocks. This was a negative day for the entire crypto market.
According to Token.Unlocks & CryptoRank, the supply of altcoins will increase by almost $650 million this week.
DYDX’s circulating token supply will be increased by approximately $480 million, almost doubling the current token supply. OP, SUI and Axelar (AXL), as well as 1 Zoll (1INCH), Hedera (HBAR) and Immutable X (IMX) will also release large amounts of tokens in the coming days.
Token unlocking results in an increase in the asset’s supply, including coins released from a vesting phase to early investors. A study conducted earlier this year by crypto analytics firm The Tie found that large unlock events often result in price declines because supply is greater than demand for the asset.
Axelar (AXL) is down 10% in the last 24 hours, according to CryptoRank. This is because about $18 million in tokens, or 5% of Axelar’s market cap, were added to Axelar’s offering on Monday as part of the monthly token release, which also included early investors.
DYDX fell 7% over the same period, ahead of the release of $480,000,000 worth of tokens on December 1st.
OP fell almost 6%. A token worth $40 million is scheduled to be unlocked on November 30th.
SUI fell 8.8% in the morning as supply is expected to rise by $48 million next week.
1INCH’s supply is expected to rise by almost 10% or $33 million on December 1st. HBAR, IMX and XBAR both saw their token supply decline by 2% to 3%. Each will receive $11 million this week.
Bitcoin (BTC), on the other hand, recorded a decline of 0.7% over the same period. The AskFX Market Index, a broad market crypto index, fell 1.5%.
