10x Research: Market Correction Possible as Crypto Token Unlocks Increase
The ongoing bullish trend in the cryptocurrency market may have a shorter duration compared to previous cycles, and it is unlikely to end with a significant surge in alternative coins (altcoins).
According to analysts from 10x Research, the growing influence of venture crypto funds, which are expected to hold a significant portion of coins in the future, could be responsible for this trend.
Additionally, the upcoming unlocking of tokens worth nearly $2 billion over the next 10 weeks could have a negative impact on altcoins, as suggested by analysts. The largest token unlock is scheduled to take place on May 15 by Aevo, a layer 2 crypto derivatives platform. This unlock will release 828.93 million AEVO tokens, equivalent to approximately $1.17 billion. Of the total coin supply of 1 billion, 18.5% will be distributed to private investors.
Another smaller token unlock is scheduled for July 24, where $39.78 million worth of WLD tokens from Sam Altman’s Worldcoin project will be released. This unlock represents 0.05% of the total token supply or 2.4% of the current circulating coins.
Furthermore, on May 12, Aptos will unlock 11.31 million APT tokens, valued at $101.67 million, which accounts for around 2.6% of the circulating supply.
In April, experts at 10x Research issued a warning, stating that the market was approaching a critical turning point that could lead to a significant correction. They identified “unexpected and persistent” inflation as the primary trigger for this potential market shift.
Considering that the bond market is forecasting less than three rate cuts and the 10-year Treasury yield is above 4.5%, it is highly likely that risk assets will undergo a price reset.
In conclusion, the current bull cycle in the crypto market may be shorter than previous cycles and is unlikely to culminate in a major altcoin rally. The influence of venture crypto funds and the upcoming token unlocks could play a significant role in shaping the market’s direction.
