The cryptocurrency platform Avalanche is set to unlock over 9.5 million AVAX tokens this week, potentially impacting market liquidity and triggering a price decline for the token. The unlocked assets, valued at approximately $99 million, represent around 2.8% of AVAX’s circulating supply. This increase in circulating supply could lead to a short-term drop in price as the tokens become less scarce.
Avalanche plans to gradually increase the circulating supply by 24.5% over the next year, with over 50% of AVAX’s total supply still locked at the moment. The previous unlock of the same token amount occurred on May 28, resulting in a slight price drop initially but a subsequent recovery in the following days.
Currently trading at $10.20, AVAX has experienced a significant decline compared to its levels at the end of January, marking a 50% decrease. The token traded above $12 throughout July before falling during the mid-August crypto market crash.
The unlocking of 9.5 million AVAX tokens raises concerns about the potential impact on market liquidity and trading volume. Investors will closely monitor the price movement following this unlock, as it could determine the short-term direction of AVAX.
It is important to note that the cryptocurrency market is highly volatile, and various factors can influence price movements. Traders and investors should exercise caution and conduct thorough research before making any investment decisions.
Disclaimer: This article is not financial advice. The information provided is based on market analysis and does not constitute investment recommendations. Cryptocurrency investments carry risks, and individuals should seek professional advice before engaging in any trading activity.
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