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Unlocked Tokens to Watch as Bitcoin Triggers New Bottom Formation
Token Unlocks: The cryptocurrency market started the second week of July on a bullish note as the leading digital asset Bitcoin found adequate support at $55000. A recent reversal from this support lifted the asset by 6.4% to trade at $58600 and triggered a fresh relief rally in the altcoin market.
However, as the coin’s price faces a steady supply from the German government selling BTC, the sustainability of this recovery is yet to be confirmed. Amid an uncertain recovery, upcoming token unlocks could have a major impact on cryptocurrencies.
Token unlocking events are scheduled times when previously locked cryptocurrency tokens are released to investors, team members, or other stakeholders. An increase in tokens in circulation can lead to a decrease in the value of an asset, according to the principle of scarcity.
Read also: Institutional FOMO on Spot Bitcoin ETF as German Government Continues BTC Sell-Off
Optimism (OP) is a layer 2 scaling solution for Ethereal designed to increase transaction speed and reduce costs by processing transactions off-chain.
Optimism (OP) | Tradingview
Over the past four months, OP coin has witnessed a steady downtrend with its price dropping from $4.86 to $1.22 low, recording a loss of 74.8%. However, amid the current market recovery, altcoins have recovered to $1.61 and increased their market cap, which has risen to $1.8 billion.
Retail investors should remain cautious on this relief rally as Optimism coin is scheduled for a Cliff Unlock on July 15. According to data from Token Unlocks, 10 million Op tokens, equal to 0.89% of the current circulating supply, will be allocated to Retroactive Public Goods Funding.
In this context, the price of optimism may find it difficult to overcome the maximum resistance of $1.86 and trigger another reversal.
Worldcoin (WLD) is a cryptocurrency project designed to build a global identity and financial network that safeguards privacy.
Worldcoin (WLD) | Tradingview
After a 5.62% increase overnight, the WLD Price suffered a 1.13% intraday pullback, taking its price to $1.90. With a market cap of $517 million, Worldcoin is struggling to maintain its dominance above the $2 mark, showing a clear downtrend on the daily chart.
The resistance trend line combined with a broader market correction has led to a significant decline in Worldcoin’s value. WLD is currently down 84% from its peak of $11.70 in March 2024.
THE World currency currently sees a Liner unlock of 22.35 million, which is currently 8.23% of the current circulating supply. On July 24, the next linear unlocks are scheduled for 6.62 million WLD per day for 540 days.
This could potentially accelerate the downside pressure, with key support levels to watch at $1.40 and $0.97.
However, potential initial reversals could occur around the psychological support levels of $1.50 and $1.00.
Read also: Fed Chairman Jerome Powell’s Testimony Puts Bitcoin (BTC) on Bullish Path
Avalanche (AVAX) is a blockchain platform that aims to rival Ethereum by focusing on speed, scalability, and versatility. Similar to the broader market movement, AVAX’s price trend reveals a massive correction in motion.
Avalanche (AVAX) | Tradingview
Trading at a 58% discount to the 52W high at $65 formed in March 2024, Avalanche is gradually preparing a trend reversal. With a falling wedge formation on the daily chart, lower price rejections reveal a strong support trend line.
As the ongoing recovery represents a 6.78% jump in 48 hours, resulting in two bullish candles, the demand is increasing significantly. In addition, the morning star on the trend line reinforces the upward movement in AVAX prices.
However, the strong resistance trendline could extend the downtrend until the price reaches the bottleneck part of the falling wedge. According to data from Token Unlocks, the Avalanche network is seeing 700k AVAX Liner unlocks, which represents 0.18% of the current circulating supply.
A radical unlock is scheduled for Avalanche on August 20, with the release of 9.54 million AVAX tokens, equivalent to 2.42% of the circulating supply, distributed among four parties.
With sustained selling, potential support levels for the AVAX Price They are at $21.8 and $18.9.
Key takeaway
The token unlocking process is essential to manage supply, incentivize long-term engagement, and maintain market stability. However, as the current relief rally has yet to reach sustainability, assets such as Optimism (OP), Worldcoin (WLD), and Avalanche (AVAX) are at risk of a prolonged crash due to token unlocks scheduled for the near future.
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Frequently Asked Questions (FAQ)
A linear unlock refers to a gradual release of tokens over a specified period of time. Instead of releasing all the tokens at once, they are distributed incrementally at regular intervals.
A cliff unlock refers to a predetermined period during which tokens are completely locked and cannot be accessed.
Psychological support levels are price levels that traders perceive as significant and are often rounded numbers, such as $1.00 or $50.00.