Altcoins
$280M Tokens Unlocked in July: Will AVAX, ARB, and APT Shake Up the Altcoin Market?
- More than $280 million worth of tokens are expected to be unlocked.
- Will the prices of ARB, APT and OP drop further?
The cryptocurrency market, especially the altcoin sector, could face wild market volatility induced by the July token release.
According to AMBCrypto’s study Unlocking TokensMore than $280 million worth of cryptocurrencies would be released in the next seven days, with Arbitration [ARB] And Apartments [APT] control most of the procurement program.
Source: Token Unlock
Aptos is expected to unlock over $70 million worth of tokens on July 12. Additionally, ARB will unlock $66.6 million worth of tokens on July 15, followed closely by Optimism [OP] to $54 million on July 30.
In less than two weeks, avalanche [AVAX] will join the supply program and unlock $245 million worth of its tokens.
Will Token Unlocking Hurt the Altcoin Market?
AMBCrypto’s assessment of the June token unlocks indicated that token price performance was mixed before and after the unlock schedule.
ARB was among the the worst performers after its release in mid-June worth $105 million. X (formerly Twitter) user DeFi Scholar noted,
“Effect on the token [ARB]:From 0.92 on the 16th to 0.77 (down 20%).
The assessment mentioned that the overall market sentiment determined the ARB’s performance during the unlocks. However, Ethereum [ETH] L2s have faced massive value declines even in better market conditions.
In fact, a report In early June, Deribit linked the poor performance of L2 ETHs like ARB and Optimism to an oversupply from unlocks.
For perspective, ARB has erased all of its 2024 gains and has been below $1 since early June.
Source: ARB/USDT, TradingView
The upcoming token supply of $66 million would make it difficult for ARB to break the downtrend line and move above $0.76.
Source: ARB/USDT, TradingView
APT has also seen significant losses following recent declines. However, it has bounced back strongly from $5 and could target $7 or the previous low above $7.5. However, the unlocking schedule could complicate things.
Notably, APT dropped 20% after unlocking over $100 million worth of tokens in June. This could happen again, especially if Bitcoin [BTC] does not extend its recovery and recovers $60,000.
However, if the negative market sentiment reverses and BTC turns bullish, the impact of the unlocks on altcoins could be minimized.