Over the past week, Avalanche's native token AVAX exhibited weaker performance compared to the broader crypto market, coinciding with an imminent unlocking event. According to data from CoinDesk, AVAX experienced a slight dip of more than 3%, contrasting with the majority of digital assets which saw gains in price. Notably, the CoinDesk20 Index (CD20), reflecting the performance of the largest and most liquid cryptocurrencies, surged by 6% during this period.

This underperformance comes ahead of a significant unlocking event scheduled for Thursday, which will inject approximately $365 million worth of previously locked-up tokens into circulation. This event is anticipated to expand AVAX's token supply by around 2.6%. At present, AVAX is trading at $38, marking a 23% decline from its peak in December.

The unlocking involves the release of 9.5 million AVAX tokens, with allocations destined for various purposes. Specifically, 4.5 million tokens will be distributed to team members, 2.25 million to strategic partners, 1.67 million to the ecosystem development foundation, and 1.13 million designated for airdrops.

As per data from Token.Unlocks, nearly 58% of AVAX's total token supply have already been unlocked, contributing to the ongoing market dynamics.

Unlocking events like this typically lead to an expansion in the asset's supply, as previously restricted coins become available following a vesting period, including allocations to early investors. Analysts, such as those at the crypto analytics firm The Tie, have observed that significant unlocking events often precipitate price declines within a fortnight, as the surge in supply outpaces the demand from investors. #Write2Earn #CryptocurrencyPotential