Altcoin
Crypto Markets Brace for Impact: $2 Billion Altcoin Token Unlocked, $11 Billion Bitcoin Distribution Imminent
- Billions of tokens unlocked could drive down altcoin prices, creating selling pressure from venture capital investors.
- Bitcoin faces distributions worth $11 billion, adding uncertainty and potential market volatility.
The cryptocurrency market is at a critical juncture, with analysts predicting a potential truncation of the ongoing bull cycle. A recent report from crypto analytics firm 10x Research highlighted the looming threat of large token unlocking in the cryptocurrency market. With nearly $2 billion worth of tokens set to come into circulation over the next ten weeks, investors are bracing for potential downward pressure on altcoins. These breakouts, typ
The report highlights the potential impact on altcoins, with the release of various tokens expected. Among them are aptos (APT), starkware (STRK), arbitrum (ARB), Immutable X’s (IMX)Avalanche (AVAX), optimism (OP), PRIME, sui (SUI), ethena (ENA), Altlayer ALT and XAI token. Venture capital investors, in particular, may feel compelled to capitalize on recent gains, potentially dampening the performance of tokens that are experiencing positive momentum.
One of the upcoming challenges looming over the cryptocurrency market is the significant volume of token unlocks expected in the coming weeks. Notably, on May 15, Aevo, a layer 2 crypto derivatives platform, will release a staggering 828.93 million AEVO tokens, totaling approximately $1.17 billion. Such massive breakouts and subsequent distributions to private investors could put downward pressure on altcoin prices.
Upcoming market correction and key insights into token breakouts
Analysts at 10x Research have spoken openly about the potential for a major correction in the cryptocurrency market. This warning stems from concerns about unexpected and persistent inflation, which could be the main trigger for a market reset. With bond market forecasts calling for fewer than three cuts and the 10-year Treasury yield rising above 4.5%, risky assets in the cryptocurrency sector could soon face more volatility.
Aside from the substantial Aevo unlock event, other token versions are on the horizon, contributing to market uncertainty. Worldcoin’s upcoming unlock of $39.78 million worth of WLD tokens on July 24 and Aptos’ release of 11.31 million APT tokens worth $101.67 million on May 12th further increases apprehension among investors. These breakouts represent a significant portion of their respective circulating supplies, potentially amplifying market volatility.
In addition to altcoins, the cryptocurrency market faces additional pressures stemming from the impending release of Bitcoin. About $11 billion in Bitcoin will be distributed to creditors of Gemini’s Earn program and the defunct Mt. Gox exchange. Analysts warn that these distributions could inject further uncertainty, contributing to what some anticipate as a wave of “crypto FUD” (fear, uncertainty and doubt) in the coming months.
According to data from the CNF Marketplace, it reflects the current state of the cryptocurrency market, showing a decline of 3.4% in the last 24 hours. Bitcoin fell 2.5% to $61,500, while ether (ETH) fell 3.6%. Bitcoin Cash (BCH) and Solana (SOL) are among the worst performers, each down more than 7%.