As a seasoned crypto analyst with years of experience in the industry, I believe that the current market situation for cryptocurrencies is far from favorable. The ongoing corrective phase has been further complicated by a wave of supply events worth billions of dollars. These events could significantly delay any meaningful recovery, as they add to the circulating supply and put downward pressure on prices.
As an analyst, I’ve observed that cryptocurrencies are currently undergoing a corrective phase. However, there is a potential delaying factor that could hinder any significant recovery: a series of supply events valued in the billions of dollars.
“Over the next ten weeks, almost $2 billion worth of token releases could flood the altcoin market, potentially leading to price decreases,” according to 10x Research’s analysis reported on Wednesday.
In the cryptocurrency world, significant releases of tokens from large holding pools are generally considered bearish signs. These unlocked tokens increase the supply by dispersing assets that were formerly secured in vesting contracts to various recipients such as team members, organizations, and early investors which include venture capital firms.
As a venture capital investor, I might feel compelled to secure my recent profits on certain tokens with positive momentum. This action could potentially limit any further potential growth, particularly for those tokens that offer unlocks or other opportunities for additional gains.
Not just altcoins facing selling pressure
According to Lunde’s prediction, the upcoming months are expected to bring frequent occurrences of fear, uncertainty, and doubt (FUD) in the cryptocurrency market.
In light of approaching supply changes, one market analyst proposed that FTX repayments could provide some alleviation.
With the approval of the bankruptcy court, approximately $14-$16 billion is set to be distributed to creditors in US dollars. A significant portion of this amount could potentially return to the cryptocurrency market, according to Arthur Cheong, founder and CIO of DeFiance Capital.
Cheong predicted that at least $3-$5 billion worth of cryptocurrency liquidity will flow back into the market as per his statement on Wednesday.
Ugly action in crypto on Wednesday
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2024-05-09 00:24