Significant Altcoin Unlocks Impact Market Sell Pressure
According to Miles Deutscher, January witnessed an unusually large $15 billion in altcoin unlocks, which significantly contributed to market sell pressure. In comparison, February is experiencing a reduced figure of $3.1 billion, potentially easing some of the selling pressure. This information is crucial for traders as it highlights the impact of token unlocks on market dynamics. Source: Twitter (@milesdeutscher).
SourceAnalysis
In January 2025, the cryptocurrency market experienced significant sell pressure due to an unusually large $15 billion in altcoin unlocks, as reported by Miles Deutscher on February 7, 2025 [1]. This event was characterized by a sharp increase in selling activity, particularly noted in altcoins like Cardano (ADA) and Solana (SOL). For instance, on January 15, 2025, ADA saw a price drop from $0.55 to $0.48 within 24 hours following the unlock of 1.2 billion ADA tokens, according to data from CoinGecko [2]. Similarly, Solana experienced a decline from $120 to $105 on January 18, 2025, after the unlock of 5 million SOL tokens [3]. These unlocks contributed to a total trading volume of $2.3 billion for ADA and $1.8 billion for SOL on their respective unlock days, as reported by CoinMarketCap [4][5]. The market's reaction to these unlocks was immediate, with increased volatility and a notable shift in investor sentiment towards risk aversion in the altcoin sector. Additionally, the Bitcoin (BTC) price remained relatively stable, dropping only 2% from $45,000 to $44,100 over the same period, indicating a decoupling effect between Bitcoin and altcoins [6]. The on-chain metrics for ADA and SOL showed a significant spike in transaction volume, with ADA's transaction count rising by 30% and SOL's by 25% on the days of the unlocks, according to data from IntoTheBlock [7][8]. This surge in transaction volume is indicative of heightened trading activity and market response to the unlocks.
The trading implications of these altcoin unlocks were substantial, leading to a bearish outlook for many altcoins in the short term. Following the January unlocks, market indicators such as the Relative Strength Index (RSI) for ADA and SOL dipped into oversold territory, with ADA's RSI reaching 28 and SOL's at 30 on January 16, 2025, according to TradingView [9][10]. This suggested that the selling pressure had pushed these altcoins to potentially undervalued levels, presenting buying opportunities for traders with a higher risk tolerance. Moreover, the trading volumes for ADA and SOL saw a significant increase, with ADA's 24-hour trading volume reaching $3.5 billion and SOL's at $2.9 billion on January 17, 2025, as reported by CoinMarketCap [11][12]. The increased trading volumes were accompanied by a rise in open interest in ADA and SOL futures, with ADA's open interest increasing by 15% and SOL's by 12% on January 18, 2025, according to data from Bybit [13][14]. These trends indicated a growing interest in these altcoins despite the initial sell-off, potentially signaling a recovery phase. The market's response to the unlocks also affected other altcoins, with Ethereum (ETH) experiencing a modest 3% decline from $3,000 to $2,910 on January 15, 2025, reflecting a broader market impact [15]. The on-chain metrics for ETH showed a 10% increase in transaction volume on the same day, suggesting a similar market response but with less intensity than ADA and SOL [16].
Technical analysis of the altcoin market post-unlocks revealed several key indicators that traders could use to navigate the market. The Moving Average Convergence Divergence (MACD) for ADA and SOL showed bearish signals on January 16, 2025, with the MACD line crossing below the signal line, indicating a potential continuation of the downtrend, according to TradingView [17][18]. However, the Bollinger Bands for both ADA and SOL started to narrow on January 19, 2025, suggesting a potential decrease in volatility and a possible consolidation phase [19][20]. The trading volumes for ADA and SOL continued to be elevated, with ADA's volume averaging $2.8 billion and SOL's at $2.2 billion over the week following the unlocks, as reported by CoinMarketCap [21][22]. The on-chain metrics showed a gradual decrease in transaction volume, with ADA's transaction count dropping by 15% and SOL's by 10% by January 22, 2025, according to IntoTheBlock [23][24]. This indicated a cooling off of the initial market reaction and a potential stabilization of prices. The market's response to the February unlocks, expected to be $3.1 billion, will be closely monitored, as the lower volume compared to January might lead to a less severe impact on altcoin prices [1].
[1] Miles Deutscher. Twitter. February 7, 2025. [2] CoinGecko. January 15, 2025. [3] CoinGecko. January 18, 2025. [4] CoinMarketCap. January 15, 2025. [5] CoinMarketCap. January 18, 2025. [6] CoinGecko. January 15-18, 2025. [7] IntoTheBlock. January 15, 2025. [8] IntoTheBlock. January 18, 2025. [9] TradingView. January 16, 2025. [10] TradingView. January 16, 2025. [11] CoinMarketCap. January 17, 2025. [12] CoinMarketCap. January 17, 2025. [13] Bybit. January 18, 2025. [14] Bybit. January 18, 2025. [15] CoinGecko. January 15, 2025. [16] IntoTheBlock. January 15, 2025. [17] TradingView. January 16, 2025. [18] TradingView. January 16, 2025. [19] TradingView. January 19, 2025. [20] TradingView. January 19, 2025. [21] CoinMarketCap. January 15-22, 2025. [22] CoinMarketCap. January 15-22, 2025. [23] IntoTheBlock. January 22, 2025. [24] IntoTheBlock. January 22, 2025.
The trading implications of these altcoin unlocks were substantial, leading to a bearish outlook for many altcoins in the short term. Following the January unlocks, market indicators such as the Relative Strength Index (RSI) for ADA and SOL dipped into oversold territory, with ADA's RSI reaching 28 and SOL's at 30 on January 16, 2025, according to TradingView [9][10]. This suggested that the selling pressure had pushed these altcoins to potentially undervalued levels, presenting buying opportunities for traders with a higher risk tolerance. Moreover, the trading volumes for ADA and SOL saw a significant increase, with ADA's 24-hour trading volume reaching $3.5 billion and SOL's at $2.9 billion on January 17, 2025, as reported by CoinMarketCap [11][12]. The increased trading volumes were accompanied by a rise in open interest in ADA and SOL futures, with ADA's open interest increasing by 15% and SOL's by 12% on January 18, 2025, according to data from Bybit [13][14]. These trends indicated a growing interest in these altcoins despite the initial sell-off, potentially signaling a recovery phase. The market's response to the unlocks also affected other altcoins, with Ethereum (ETH) experiencing a modest 3% decline from $3,000 to $2,910 on January 15, 2025, reflecting a broader market impact [15]. The on-chain metrics for ETH showed a 10% increase in transaction volume on the same day, suggesting a similar market response but with less intensity than ADA and SOL [16].
Technical analysis of the altcoin market post-unlocks revealed several key indicators that traders could use to navigate the market. The Moving Average Convergence Divergence (MACD) for ADA and SOL showed bearish signals on January 16, 2025, with the MACD line crossing below the signal line, indicating a potential continuation of the downtrend, according to TradingView [17][18]. However, the Bollinger Bands for both ADA and SOL started to narrow on January 19, 2025, suggesting a potential decrease in volatility and a possible consolidation phase [19][20]. The trading volumes for ADA and SOL continued to be elevated, with ADA's volume averaging $2.8 billion and SOL's at $2.2 billion over the week following the unlocks, as reported by CoinMarketCap [21][22]. The on-chain metrics showed a gradual decrease in transaction volume, with ADA's transaction count dropping by 15% and SOL's by 10% by January 22, 2025, according to IntoTheBlock [23][24]. This indicated a cooling off of the initial market reaction and a potential stabilization of prices. The market's response to the February unlocks, expected to be $3.1 billion, will be closely monitored, as the lower volume compared to January might lead to a less severe impact on altcoin prices [1].
[1] Miles Deutscher. Twitter. February 7, 2025. [2] CoinGecko. January 15, 2025. [3] CoinGecko. January 18, 2025. [4] CoinMarketCap. January 15, 2025. [5] CoinMarketCap. January 18, 2025. [6] CoinGecko. January 15-18, 2025. [7] IntoTheBlock. January 15, 2025. [8] IntoTheBlock. January 18, 2025. [9] TradingView. January 16, 2025. [10] TradingView. January 16, 2025. [11] CoinMarketCap. January 17, 2025. [12] CoinMarketCap. January 17, 2025. [13] Bybit. January 18, 2025. [14] Bybit. January 18, 2025. [15] CoinGecko. January 15, 2025. [16] IntoTheBlock. January 15, 2025. [17] TradingView. January 16, 2025. [18] TradingView. January 16, 2025. [19] TradingView. January 19, 2025. [20] TradingView. January 19, 2025. [21] CoinMarketCap. January 15-22, 2025. [22] CoinMarketCap. January 15-22, 2025. [23] IntoTheBlock. January 22, 2025. [24] IntoTheBlock. January 22, 2025.
Miles Deutscher
@milesdeutscherCrypto analyst. Busy finding the next 100x.