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Celestia unlock triggers market shift with increased TIA supply

Celestia unlock triggers market shift with increased TIA supply

GrafaGrafa2024/10/31 10:00
By:Isaac Francis

Celestia (CRYPTO:TIA), a modular blockchain network, recently executed a major unlock of its native token, TIA, releasing approximately $890 million worth of tokens at current market prices. 

The unlock has led to a nearly 20% decline in TIA’s value over the past week, with the token now trading 77% below its all-time high. 

Token unlocks are often perceived as bearish events in the crypto market due to the increased supply, which can lead to more tokens being sold on exchanges. 

However, the market response to unlock events is not always straightforward. 

In some cases, if the anticipated price drop does not occur, short positions might be closed, leading to a reversal in price movements. 

For Celestia, around 175 million previously locked TIA tokens were released to early contributors, seed investors, and project stakeholders, effectively doubling the circulating supply. 

While such a significant increase in supply typically raises concerns, some experts see potential opportunities. 

Chris Burniske of Placeholder expressed optimism about TIA’s future, stating, “The Celestia ecosystem is operating at full speed, providing a dynamic environment for developers.” 

He emphasised that TIA prices below $5 present an attractive opportunity in the current market. 

Despite the recent decline, some analysts believe that the unlock’s impact might be less severe than expected, presenting a chance for long-term investors to accumulate. 

However, there are ongoing concerns, as Celestia plans to continue regular unlocks, similar to other projects like DYDX, which have seen supply increases over time limit price growth.

At the time of reporting, the Celestia price was $4.67.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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