The cryptocurrency market faces a potential double whammy in the coming week. Not only are major tokens like Aptos (APT), XAI, and Immutable X (IMX) experiencing price drops, but a significant token unlock event looms large, threatening to send their values even lower.
Unlocking a Flood of Tokens
Data from Token Unlocks reveals that a combined $161 million worth of APT, XAI, and IMX tokens are scheduled to be unlocked next week. This influx of new supply into the market coincides with a bearish sentiment already impacting these tokens. All three have dipped over 5% in the last 24 hours, adding fuel to concerns about a potential price plunge.
Decoding Token Unlocks and Price Impact
Token unlocks refer to the release of previously locked tokens. These tokens are typically held by project founders, developers, and investors during the initial stages of a project. Unlocks can dilute the existing supply, potentially decreasing the value of tokens already held by investors.
A Look at the Upcoming Unlocks
The XAI network is set to lead the charge with a $56.35 million token unlock on Monday. APT and IMX will follow suit, releasing $63.3 million and $41.57 million worth of new tokens respectively.
Existing Downtrend Raises Red Flags
The upcoming unlock event coincides with a worrying trend for all three tokens. APT, currently trading at $5.60, has been on a downward spiral since March, wiping out all its 2024 gains. News of a previous unlock in April triggered a 16% price drop, and analysts fear this new event could exacerbate the decline.
Similar Stories for XAI and IMX
XAI and IMX haven’t fared much better. XAI prices have fallen 15%, while IMX has dipped by 8.5%. While a previous IMX token unlock in April didn’t cause a significant price swing, it was followed by a period of harsh declines.
Beyond the Big Three
The coming week will also see token unlocks for NTRN, FORT, HNT, DYDX, 1INCH, and ENA. Notably, data from Crypto Koryo reveals that DYDX, IMX, and APT were among the worst-performing tokens in the first half of 2024.
Investor Caution Advised
With the combined effect of a bearish market and a significant token unlock event, investors in APT, XAI, and IMX should exercise caution in the coming days. Closely monitoring price movements and potentially adjusting investment strategies may be prudent steps to navigate this potentially volatile period.
