Winter Coming Altcoins: Bloomberg reports that early project investors aim to cash out their tokens as soon as possible to secure short-term gains. Instead, they plan for the future and would not have Altcoins Token Unlocks on their balance sheets.
According to data from the Token Unlocks portal, 120 projects are anticipated to unlock tokens in 2024. This platform covers 138 projects in total. Market experts put the combined worth of these assets at $58 billion.
According to Edward Chin, co-founder of Parataxis Capital, an investing firm, the altcoin market is under extreme pressure. Meanwhile, brokers frequently have to provide prospective buyers with early investor tokens at a discount of 40% or more.
How does unlocking affect tokens?
The time and magnitude of token unlocking can significantly affect market dynamics. If many tokens are unlocked all at once, token prices can fall for a short period, which can discourage buyers.
As investors respond to the increasing supply of tokens, market swings might occur during token unlocking events. The unlock timetable and its anticipated influence on token values may cause investors to rebalance their positions, which in turn causes price movements.
What tokens fell after unlocking?
For instance, in the last three months, the value of the dYdX project’s token, DYDX, has decreased by 61%. As of this writing, the asset is worth $838 million, with a current market valuation of $1.4. The Avalanche (AVAX) and Pyth Network (PYTH) initiatives are experiencing the same thing. Their token values decreased by 55% and 66% during that time.
All three projects on the list were unlocked in May 2024. The general market volatility makes the problem worse for cryptocurrencies. Since mid-March 2024, just 12 of the more than 90 most significant crypto assets by market capitalization have demonstrated positive returns. According to the statistics, about 80 projects exhibit negative trends in this metric. Simultaneously, 23 assets saw price drops of 50% or more.
Altcoin crypto winter
According to 10xResearch, the price of the top 115 Winter Coming Altcoins has dropped by over 50% from its 2024 high. This correction continues the market cycle, much like the drops in 2017 and 2021. The decline in cryptocurrency prices can persist unless fresh capital flows in and liquidity is restored.
Despite the decline of Winter Coming Altcoins, Bitcoin (BTC) and Ethereum (ETH), the two most prominent cryptocurrencies, have remained relatively stable. They have fallen 11% and 13% from their highest points this year.
Analysts expressed concern in May that the release of a large number of tokens might cause altcoin values to fall. The anticipated release of about $2 billion in unlocked tokens before July might cause a sell-off in cryptocurrencies and a decline in pricing.
The activities of venture capital funds are to blame, say the experts. The first three months of 2022 saw these funds pour $13 billion into alternative cryptocurrencies. Venture capital firms are compelled to liquidate their tokens due to investor demands to return their capital. Investors’ increasing fascination with AI is making matters worse.
Should traders wait for cryptocurrency season?
Bitcoin accounts for 54.6% of the cryptocurrency industry’s total market capitalization, which is $2.4 trillion in volume. According to the so-called Bitcoin Dominance Index, which tracks market sentiment and cycles, smaller cryptocurrencies usually beat Ethereum and Bitcoin regarding growth rates.
When the crypto market is experiencing a cyclical slump, the market capitalization of the leading digital currency tends to rise. It falls during a market bull run when numerous Winter Coming Altcoins Token Unlocks outperform Bitcoin in growth. As a result, the first cryptocurrency dominance index indicates the market cycle and investor sentiment.
Experts at Swissblock have announced the launch conditions for the cryptocurrency season. According to experts, traders should keep an eye on the Ethereum to Bitcoin price ratio or the price of Ethereum relative to the Bitcoin price. Historically, analysts have predicted that a rise in the Ethereum/Bitcoin combination would signal a flood of funding into alternative Titan of Crypto, a technical analyst, has also voiced optimism about the April all-season.
He claims that there is ample room for expansion in the cryptocurrency sector. In their experience, analysts typically see a turning point in the week following the Bitcoin halving. According to technical indicators, a profitable all-season may be on the horizon, which means altcoins will soon be front and center.
