Regardless of the global crypto market’s current bullish trend, as of Wednesday (April 12), roughly 4.5 million Aptos (APT) tokens will be released into circulation. This release or token unlocked will occur at 05:30 UTC tomorrow and could hurt APT’s price action.
The upcoming unlocked tokens will be the fourth vested Aptos tokens in 2023. The first release occurred on January 11, with 4.5 million APT tokens unlocked. The second on February 12 and the third on March 12, releasing the same amount of 4.5 million tokens.
Millions of Aptos About To Be Released Into Circulation
At current prices, a total of 4.5 million APT set to be released into circulation tomorrow is worth about $53 million. This amount is nearly 50% of the asset’s trading volume in the last 24 hours.
Should a large amount worth of Aptos like that get released into circulation without readily available demand, a significant movement could be on the asset’s price chart.
Notably, the amount of APT set to be released into circulation would push the asset’s circulating supply from its current $181 million at the time of writing to nearly above $186 million. The upcoming unlock is a part of the Aptos Foundation’s monthly token release.
Vesting is a process where a certain amount of tokens are set aside and released gradually over some time rather than all at once. It is initiated via a smart contract that holds the tokens and specifies the conditions under which they will be released.
The tokens are released to the founding team, community members, core contributors, and investors. As for the 4.5 million tokens set to be released tomorrow, 3.2 million will be allocated to the community, while 1.3 million will be distributed within the foundation.
Usually, tokens sent to the foundation are used for development and research, market and community outreach, ecosystem support, staking, and governance.
What Happens To APT’s Price?
Looking back at the usual token unlock history, APT could experience short-term volatility or a price plummet based on whether a low demand is already on the ground after the token release tomorrow.
In February, when the second vesting release occurred, APT saw a sharp decline in value, plummeting by over 5% daily. However, from a technical perspective, APT might record an upward trend after the unlock tomorrow, picking up from its rally today.
On the 1-day time frame, the asset has formed a double bottom and is now set to shape a W pattern fully. In addition, Aptos has a major high liquidity, just above $14. Should APT continue its upward momentum and not invalidate the W pattern, APT could trade above $14 in the coming days.
Meanwhile, over the past two weeks, Aptos has recorded an upward movement in its trading volume, indicating a possible accumulation. This means there might already be a readily available demand on the ground. Even if the circulating supply increases tomorrow, it might not significantly impact the Aptos market.
Featured image from Unsplash, Chart from TradingView