After the cryptocurrency market experienced significant losses this morning, we learned that 14 cryptocurrencies are token unlocks nearly $230 million this week. This has raised concerns about increased volatility.
Last week was turbulent, with significant price drops and pronounced bearish sentiment. The major upcoming releases are expected to deepen selling pressure.
Data from TokenUnlocks reveals that the unlocks by more than a dozen cryptocurrencies will total $229.77 million. Aptos, The Sandbox, and Arbitrum’s releases will have a particularly pronounced impact. The three leading cryptos make up $174.96 million of this sum.
Aptos, SAND, Arbitrum prepare for token unlocks
Aptos (APT) will release 11.31 million tokens on August 12th, with an estimated value of $66.95 million. This release will increase the token’s supply by 2.4%.
Last week, Aptos experienced significant price gains of 28%. However, today the APT token’s value has decreased by around 6%, similar to most cryptocurrencies.
On August 14th, The Sandbox (SAND) will also unlock 205.59 million tokens, valued at just under $55 million, accounting for 10% of SAND’s market cap. While the value of the SAND token increased by 14% over the past week, it has retraced 50% of those gains today.
Furthermore, Arbitrum is set to release ARB tokens worth slightly over $53 million on August 16th, leading to a monthly inflation rate of 2.8%. Although the token’s value surged by 20% over the past week, it is down by 7% today, in line with the overall cryptocurrency market trend.
Expected short-term and long-term effects
Analysts anticipate that the upcoming token unlocks will likely increase market volatility and cause further price drops. The increase in the supply of circulating tokens may lead to selling pressure, pushing prices down.
Preemptive selling before the token release might lead to a drop in prices before the tokens are even available. If the community believes that many token holders will sell, it may lead to panic selling and worsen the price decline.
Meanwhile, the long-term impact on prices will depend on the project’s fundamentals, market conditions, and how the released tokens are utilized. If projects like Aptos, The Sandbox, and Arbitrum continue to grow and demand increases, then long-term prices could recover and even exceed previous levels.
