Dec 11, 2024

6thTrade


Aptos (APT) has seen a sharp decline in market capitalization, dropping nearly $2 billion in just five days. On December 6, the market cap was approximately $8.25 billion, but it has since plunged to $6.36 billion, reflecting a significant loss.

This decline coincides with the upcoming token unlock, a key event expected to trigger considerable volatility for APT.

Aptos Faces Supply Shock with Upcoming Token Unlock

Aptos’ market cap surged above $8 billion when its price rallied to $15.25. The market cap is calculated as the product of a cryptocurrency’s price and its circulating supply, meaning that when the price rises, the market cap increases. Similarly, if the price stagnates but the circulating supply increases, the market cap will also rise.

The recent drop in market cap is partially attributed to the broader market downturn, with many altcoins experiencing declines from their recent peaks. Additionally, the scheduled token unlock, set to release 2.11% of Aptos’ total supply (worth $134.47 million), is likely contributing to the market's weakness. Token unlocks are critical events in the crypto market, as they release previously locked tokens into circulation, often leading to increased volatility.

If the buying pressure doesn’t match the upcoming supply shock, Aptos could face further price declines following the unlock event.

Aptos Price Faces Bearish Momentum

Aptos had recently been trading within an ascending triangle pattern, a typically bullish formation that suggests the potential for further upward movement. However, as of now, the price has dropped notably below the pattern's neckline, signaling that the expected bullish breakout has failed.

Further confirming the bearish trend, the Cumulative Volume Delta (CVD)—which tracks the difference between buying and selling volume—has fallen into negative territory. A negative CVD suggests more selling pressure than buying activity, which could weigh on the price.

As it stands, Aptos is likely to drop to the $9.65 level in the short term. However, if demand surges and buying activity picks up, the price could potentially recover to $15.33, depending on market dynamics.

In summary, the upcoming token unlock poses a significant risk to Aptos, and unless buying pressure picks up, the altcoin may continue to struggle with downward momentum.