Aptos Faces Market Uncertainty as Token Unlock Event Looms
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Aptos, the Layer 1 protocol co-founded by former Facebook employees, is encountering a wave of skepticism in the cryptocurrency market as it approaches a critical token unlock event scheduled for November.
According to data from TokenUnlock, this event will unleash a staggering 20 million APT tokens, currently valued at $5.15 each, adding up to a substantial $103 million injection into the market. This release constitutes more than 8.5% of the circulating supply, totaling 235.02 million APT tokens.
These tokens have been diligently locked, strategically preventing early investors and project insiders from rapidly selling their holdings, which could lead to a sharp decline in market value. Nevertheless, the impending unlock promises to elevate liquidity significantly, potentially applying downward pressure on the token’s price.
Liquidity Unlocks Typically Trigger Bearish Reaction; Aptos’ Will Be No Different
A recent analysis by The Tie, as reported by CoinDesk, highlights the enormity of this impending event. The 20 million APT tokens slated for release on exactly November 11 represent a staggering 112% of the average daily trading volume witnessed over the last month. Furthermore, these unlocks are set to coincide with monthly staking reward releases and community and foundation allocations.
Historically, data from the perpetual futures market suggests that liquidity-increasing unlocks often correlate with price downturns. This trend is accentuated by the current negative open-interest-weighted funding rates, which hit their lowest levels since February. In simple terms, short sellers are essentially paying long buyers to maintain their bearish positions, underscoring the prevailing skepticism.
Aptos, as a Layer 1 protocol, stands at the forefront of the competition for market dominance in the thriving cryptocurrency sphere. Its mission revolves around delivering scalability, security, and interoperability for decentralized applications.
However, amidst the looming token unlock event and prevailing bearish sentiments, the path forward for Aptos remains uncertain. Its resilience and ability to weather the current storm will be closely watched as it navigates this critical juncture in the cryptocurrency market. Investors and enthusiasts alike are poised for a turbulent yet pivotal ride in the coming months.
