Avalanche (AVAX) Market Cap Plunges Ahead of Token Unlock and Sell-Offs
Avalanche (AVAX) has experienced a significant decrease in its market capitalization, with almost $1 billion in value disappearing on February 21. This decline is a result of the anticipated token unlock and subsequent sell-offs, as reported earlier by Finbold.
Currently, Avalanche’s market cap stands at $13.52 million, compared to $14.42 billion just 24 hours ago.
The token is currently trading at $36.77, and there are approximately 367.716 million AVAX tokens in circulation. However, this supply is set to increase by 9.54 million AVAX through vesting contracts, which will exert massive selling pressure worth over $365 million.
AVAX Token Unlock and Distribution
Avalanche’s previous token unlock occurred on August 26, 2023, and had a significant impact on the price of AVAX. At that time, one token was valued at $10.60, which is approximately three and a half times lower than its current rate.
In terms of distribution, the team will receive 47% of the allocations for this year. Starting from February 22, team members will have the opportunity to liquidate 4.50 million AVAX tokens, equivalent to around $177.62 million.
‘Strategic Partners’ and the ‘Foundation’ will also witness an increase in their treasuries by 2.25 million and 1.67 million AVAX tokens respectively. This raises concerns about a potential sell-off exceeding $154.6 million by these parties.
Furthermore, the highest liquidity unlock involves 1.13 million AVAX tokens ($44.40 million) designated for a community airdrop, which may result in less strategic selling behavior from retail investors.
Proceed with Caution
Investors and traders in Avalanche must exercise caution and speculation in the coming days. Cryptocurrencies are highly volatile and unpredictable, influenced by whales and market makers seeking maximum profits.
The significant token unlock event could further intensify the ongoing sell-off, impacting AVAX’s short-term prices even more.
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