AVAX drops ahead of new token release

Avalanche's own cryptocurrency has recently experienced a marked price drop. One possible reason: new tokens worth $365 million will soon be released. According to Token.Unlocks about 9.5 million previously blocked AVAX tokens will be released Thursday night. This will increase the cryptocurrency's circulation volume by about 2.6 percent.

At the time of writing, AVAX is trading at USD 37.43 - a decrease of 4.03 percent compared to yesterday. Thus, the AVAX price is down 11.6 percent since a week ago, despite the bullish crypto market.

Yet it should be noted that AVAX is certainly not alone in this - Solana (SOL), for example, also fell double-digit week-on-week and is currently trading 10.6 percent lower than just seven days ago.

About 4.5 million of the new tokens will be distributed to team members. 2.25 million will go to strategic partners, another 1.67 million will go to the "Ecosystem Development Foundation," and finally, 1.13 million of the tokens will be used for airdrops.

Data on the chain show that only about 58 percent of tokens have been released. Releasing tokens leads to an increase in the supply of the asset and frees previously locked tokens from a lock-up period.

It is not only the AVAX price that is reacting sensitively to the release of new tokens. Other tokens such as Arbitrum (ARB) are also under significant downward pressure as investors prepare for the upcoming release of tokens.