Avalanche (AVAX) — among the leading layer-1 blockchains for DeFi and Web3 — could suffer a significant negative impact in price on August 26, as 9.54 million AVAX ($101.14 million, at press time prices) of new tokens will be put into circulation on this day.
This massive token unlock amounts to 2.77% of Avalanche’s current circulating supply of 344.05 million AVAX, overcoming the total exchange volume of $83 million for the token in the last 24 hours from press time. Considering uncertain times, a sell-off event could drive the project’s price further down.
From the total unlocked amount, this is how distribution will take place:
- Strategic Partners (23.5%): 2.25 million AVAX ($23.99 million)
- Foundation (17.5%): 1.67 million AVAX ($17.77 million)
- Team (47%): 4.5 million AVAX ($47.97 million)
- Airdrop (12%): 1.13 million AVAX ($11.99 million)
Avalanche currently has an estimated annual inflation of 24.5%, according to Token Unlocks.
Avalanche price analysis
Avalanche is exchanging hands at $10.53 by press time, with a daily drop of 2.72% in the last 24 hours. AVAX has lost over 23% of its value in the month (last 30 days), moving from $13.75 to current prices. This indicates that the market could have been already pricing the tokens unlock.
The order book for the highest volume pair (AVAX/USDT on Binance) has around 330,520 AVAX buying orders from $10 to $2.
Meaning that, if only 3% of the unlocked total on August 26 is sold in a single order on Binance for USDT, the order book would be completely whipped, driving Avalanche’s price to $2. This is an unlikely scenario but helps to demonstrate the weight of this upcoming event.
All things considered, it is impossible to know the real impact on this cryptocurrency’s price, with more tokens being put into circulation. And price action will depend on further developments related to Avalanche, as well as the general sentiment on the wider crypto and macroeconomic landscape.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.