Written by: Taran, founder of the OTC trading platform STIX
Compiled by: Azuma, Odaily Planet Daily
Editor's Note: Celestia will unlock 175.59 million TIA tonight at 22:00 Beijing time, worth approximately $900 million, accounting for 79.91% of the current circulating supply. This is one of the largest and most highly anticipated unlocking events in this cycle. Regarding the market structure of TIA after the unlocking, Taran, the founder of the OTC trading platform STIX, provided his professional analysis based on on-chain data, futures data, and data from the STIX platform. Taran believes that the actual spot selling pressure is not as high as the market imagines; furthermore, the funds that shorted early for hedging need to close their positions, which may further offset the spot selling pressure; additionally, most tokens have already exchanged hands in the OTC market, further complicating TIA's subsequent momentum.
The following is the original content from Taran, compiled by Odaily Planet Daily.
This chart outlines the new circulation of Celestia (TIA) as of October 31, 2024, which I will explain in the following text.
We accurately calculated the changes in TIA's circulation entering November using on-chain data (data sourced from Celenium). The final conclusion is that after the unlocking, it is expected that 92.3 million TIA will enter circulation, which is the upper limit of new spot selling pressure.
TIA in staking requires 21 days to unstake, and those who wish to trade TIA immediately on the unlocking date of October 31 have already unstaked. Currently, the total of all 'unstaked tokens' (including 24.1 million tokens belonging to insiders, whose status remains uncertain) and 'tokens in the unstaking queue' is approximately 92.3 million TIA.
This corresponds to a maximum selling pressure of approximately $460 million, accounting for about 50% of the total unlock amount, meaning that the actual selling pressure may only be half of what people expect.
If we compare the actual new circulation with the current circulation, this indicates a 41.8% dilution of circulation.
A large number of unlocked tokens have been exchanged through the OTC market, and buyers choose to hedge in the futures market, leading to a surge in TIA's funding rate over the past few months. We expect that after the unlocking, short positions in the futures market will decrease, partly offsetting the selling pressure in the spot market. This funding allocation pattern may serve as a bullish signal for spot buyers.
Our analysis assumes that 11 million TIA, which will be unlocked tonight (excluding the subsequent linear unlocking portion), has already been exchanged through the OTC market, and we categorize them as 'unstaked tokens' (these tokens come from treasury addresses and are not marked in the browser). We have drawn a total of 292 unlocking addresses, with some not fully depicted, and these discrepancies are also counted in the 'unstaked tokens' category.
STIX has witnessed the changes in TIA's OTC trading during this cycle.
There is no doubt that TIA is one of the most actively traded assets in this cycle's OTC market. The main reason is that in the early stages of this round, TIA provided an early opportunity for buyers eager for directional positioning; sellers also have their own motivations, including realizing significant unrealized gains (PNL) and failing to anticipate the upcoming bull market (Q3 of 2023).
By the first quarter of 2024, the bull market trend had solidified, and TIA had risen above $20. At this point, OTC activity was actually quite limited; on one hand, sellers were unwilling to accept larger discounts (40%+), and on the other hand, buyers were also hesitant to bid too high (over $8.5). During this time, we could hardly see any OTC trading activity, as sellers generally 'felt they had already made a lot' and wanted to maintain their risk appetite, even though they had the opportunity to realize returns of 100 to 800 times on their investments.
The situation changed when TIA fell below $5, which is also when the Celestia Foundation began to raise $100 million in OTC round financing at a price of $3. The lock-up conditions for buyers are the same as those for private investors: 33% will be unlocked on October 31, 2024 (less than 2 months from this round of financing), followed by a linear unlocking over 12 months.
In the third and fourth quarters of 2024, TIA's OTC trading has been very active, with sellers actively liquidating various shares, including the initial unlocking shares and all subsequent shares. On STIX, the OTC trading volume of TIA has been approximately $60 million since July, assuming that STIX holds 75% of the OTC market share, this could indicate that the volume of TIA exchanged through various OTC liquidity channels exceeds $80 million.
TL;DR
In summary, the short positions in the futures market will gradually close before the unlocking date arrives, which means that the funding rate could reset to 0 or a positive number. Those who miss the October 9th deadline for unstaking may unstake later in October, leading to an increase in circulating supply in November. Regardless, the scale of new supply is enormous, making this one of the most well-known unlocking events in this cycle, and combined with the impact of OTC trading, it may make TIA's subsequent trend more unpredictable.
