- The Avalanche network will release 9.5 million tokens on Feb. 22, with analysts concerned that it could deal a big blow to AVAX, which has been flying in the past month.
- AVAX has barely moved in the past week, but since hitting a two-month low at $27 in mid-January, the token has been on an uptrend amid surging trading volume.
The Avalanche network’s token unlock is edging closer, and with it, speculation on whether it will deal a blow to AVAX or be a tailwind for the project. While some project that the influx of tokens will be detrimental to the price, others believe it could boost AVAX and push it to $45.
The unlock will be in about two days and nine hours—specifically, in the early morning hours of Feb. 22, according to TokenUnlocks. The network will release 9.54 million, which accounts for 2.6% of the total supply and is worth $379.76 million.
The bulk of the released tokens will go to the Avalanche team, which will receive 4.5 million AVAX, worth $179 million. Strategic partners at 2.25 million AVAX (worth $89.55 million) are second on the list, with the Avalanche Foundation getting $66 million worth of tokens. The rest (1.13 million AVAX worth $44.7 million) will be distributed to the ecosystem through airdrops.
The previous unlock was on Nov. 24, when the network released a similar number of tokens, but since the price was much lower at the time, they were worth $198 million.
What Happens to AVAX After Token Unlock?
Analysts are divided on what will happen to the price of AVAX once the tokens are released in two days. The last time the network released tokens was in November, and with the entire market bullish at the time, the extra tokens didn’t alter the momentum for Avalanche, with AVAX hitting a high of $48 barely a month after the release.
However, before that, the token release had been a headwind for the token. In August, the AVAX token lost 12.5% within the first month following the token release. Notably, the crypto had been in a freefall for months (since late April), and the token release seemed to exacerbate the downfall.
From these two releases, it’s clear that the effect the release has relies on the prevailing market conditions. If AVAX is on an uptrend with enough momentum, the token release will hardly dent the overall price direction.
At press time, AVAX trades at $39.80, losing 1.80% in the past day despite a 14% surge in trading volume to $506 million. The token’s price has barely changed in the past seven days despite some volatility that set some intra-day records as high as $43. However, over the past month, the token has gained 20%.
In the past five months, AVAX has recorded positive monthly returns in all but one. In October, it gained 22.5%, while in November and December, it recorded average returns above 80%. It dipped 14% in January but picked up on its momentum this month, where it has returned 20.1%.
If history is anything to go by, AVAX will record positive returns in March. Since its launch in September 2020, Avalanche has never recorded negative returns in March, the only month with a 100% positive record.
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