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$1 billion wiped from AVAX in a day amid massive token unlock

$1 billion wiped from AVAX in a day amid massive token unlock

Avalanche (AVAX) has seen nearly $1 billion worth of value vanishing from its market cap on February 21. This happened in anticipation of Avalanche’s awaited token unlock and sell-offs, as reported by Finbold on February 17.

In particular, Avalanche currently has a $13.52 million market cap against the $14,42 billion capitalization 24 hours ago.

Meanwhile, the token trades at $36.77, with a 367.716 million AVAX circulating supply. In a few hours from the time of writing, vesting contracts will increase this supply by 9.54 million AVAX. Therefore, this creates massive selling pressure worth over $365 million.

Interestingly, the current losses may be due to the cryptocurrency market trying to price the expected sell-off. Frontrunning the entities that will benefit from the token’s inflation.

Avalanche (AVAX) market data and daily market cap chart. Source: CoinMarketCap

AVAX token unlock and distribution

Notably, Avalanche’s last unlock happened on August 26, 2023, with a massive impact on the price of AVAX. By then, one token was priced at $10.60, approximately 3.5 times lower than its current rate.

Regarding distribution, the team is set to receive 47% of the allocations for this year. Starting February 22, team members will have access to liquidate 4.50 million AVAX, valued at approximately $177.62 million.

Moreover, both ‘Strategic Partners’ and the ‘Foundation’ will see their treasuries grow by an addition of 2.25 million and 1.67 million AVAX, respectively. This scenario poses a potential risk of a sell-off exceeding $154.6 million by these parties.

However, the highest liquidity unlock involves 1.13 million AVAX ($44.40 million) designated for a community airdrop. This is due to retail having a less-strategic selling behavior.

February 21 AVAX unlock distribution. Source: TokenUnlocksApp

In conclusion, Avalanche investors and cryptocurrency traders must speculate with caution in the following days. Cryptocurrencies are volatile and unpredictable, moved by whales and market makers looking for the highest possible profits.

Such a massive token unlock could fuel the already happening sell-off, further impacting AVAX’s short-term prices.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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