AXS token, which feeds into the Axie Infinity game token, saw a significant rally on Monday (23). According to CoinGecko, the price of the token is set at R$66.92, up 39.5% in the last 24 hours.
This result means that AXS has reached its highest value since October. The number of futures contracts increased by 156% to $104 million over the past 24 hours.
The estimate comes despite the imminent opening of millions of dollars in AXS tokens, which indicates a depreciation of the coin. After all, the tendency is for investors to sell these tokens and drive the price down. But what could be causing this sudden appreciation?
Reportedly, the Axie Infinity Network is expected to release 4.8 million AXS tokens into circulation on Monday. The total corresponds to just over R$321 million, based on AXS current quotation, and represents 1.8% of the 270 million AXs in circulation.
Token unlocks are usually bearish catalysts that release liquidity, especially in bear markets. Investors often sell tokens to lock in profits or offset losses.
Therefore, networks choose to keep their tokens locked for a period of time. This prevents large token holders, or even project team members, from selling out at once and causing prices to drop.
According to Lex Hartmann, managing partner of cryptocurrency investment firm Hartmann Capital, the disconcerting rally stems from hope. In this sense, the market expects the Axie team to announce a positive catalyst to neutralize the negative impact of unlocking.
“Over the past 12 months, cryptocurrency teams have begun to build a track record of leaving large ads for open days. It has happened so consistently that people are now anticipating an optimistic stimulus for Axi,” Hartmann said.
That is to say, the cancellation news itself is bad, but the market expects the team to have positive news. Therefore, the current evaluation is nothing more than hopeful.
“As we are seeing positive market momentum, teams with future unlocks will be making good news that they have held for months when the market was dead,” the Unlocks Calendar website tweeted Jan. 14.
AXS is one of the many networks that are gaining ground before opening their own tokens. dYdX, the token from the eponymous exchange focused on permanent decentralization, jumped 64% this month on the same forecast.
APT, the native token of the Aptos blockchain, also rose by 40% in the week leading up to the token opening, which occurred on January 12. The price of the cryptocurrency has since doubled and reached R$69.69.
“The market has become so reflexive that people are buying tokens in anticipation of the news being released,” Hartmann said.
But the CEO cautions about what he considers to be “unethical” in this situation. Hartmann says that many networks invent the predictions before opening them up to generate an artificial valuation. With this, large investors can sell the tokens at greater profits.
“I see this new trend as completely unethical because it creates hype to help investors get rid of the retail business [investidores] “Those who are not familiar with things like Fatah,” said Hartmann.
Some observers have long argued that the effect of the openings underscores the prevailing market trend. Major token unlocks are a complex event that interacts with market psychology. Simply put, large openings can be bullish triggers and bearish triggers in bears.