AEVO price could bottom out here as team, backers announce plan to voluntarily re-lock nearly 15% of supply

Team, backers to voluntarily re-lock ~15% of supply, a sign of long-term commitment to making Aevo leading ETH-based derivatives DEX.

Aevo (AEVO) price ignored the call to recover that Bitcoin (BTC) price sent on Wednesday, after the April CPI inspired bullish sentiment in the market. While altcoins recovered, AEVO extended to a new all-time low.

Also Read: AEVO, APT, ARB among $1.33 billion worth of token unlocks lined up for next week

Migration of RBN to AEVO officially completed

Aevo ecosystem held a voluminous token unlock on Thursday, May 15, where 827.6 million AEVO tokens (752.36% of its circulating supply) and worth $1.04 billion, were unleashed. The "unlock" was not a typical insider/VC/team unlock. Rather, it was the ability for RBN holders to migrate their holdings to the rebranded AEVO tokens. Approximately 40% of the unlock was comprised of the DAO converting RBN to AEVO.

With this, Aevo indicates, “…almost all of the AEVO fully diluted valuation is already circulating,” adding, “unlike most newly launched projects, there is no monthly vesting and unlocks which may weigh on the token supply over the next few years.”

Nearly 15% of AEVO supply to be locked until end of year

As part of the network’s commitment to catapult Aevo to the helm of Ethereum-based derivatives decentralized exchanges, the team and backers have willingly decided to relock 15% of the AEVO token supply until the end of the year. This could help increase the Aevo price.

• Reducing supply by taking them out of circulation, when countered by constant or increasing demand, causes a price surge.
• Locking tokens can also create a perception of scarcity and exclusivity, potentially attracting more buyers looking to buy the locked tokens.
• It is a show of long-term commitment among token holders, which can help build trust and confidence in the project. This stability and commitment can attract more investors and contribute to a positive price trend.
• By locking up tokens, volatility in the Aevo price may be reduced as there are fewer tokens actively being traded. This can lead to a more stable price over time, which may be appealing to investors looking for a less volatile investment.

With the completion of token migration and plans to reduce the circulating supply, Aevo price could scale a recovery.

Why Aevo price could bottom out here

After the Wednesday dip, the Aevo price broke below the lower band of the Bollinger indicator at $0.85. This indicates an oversold condition in the market and could potentially indicate a buying opportunity for traders looking to enter the market. It also signals that the downtrend is losing momentum and a potential reversal may be imminent.

The Relative Strength Index (RSI) has also dipped sub-30, reinforcing the oversold thesis. This often precipitates a reversal higher.

For the bearish outlook to be negated, the Aevo price must record a candlestick close above the confluence of resistance between the 50-day Simple Moving Average (SMA) and the horizontal line at $1.90.  

AEVO/USDT 1-day chart

Conversely, the Aevo price breaking below the lower band of the Bollinger indicator could also signify a continuation of the existing downtrend. In such a case, AEVO could record another lower low.