Aptos price fall to likely extend beyond this week’s 20% crash ahead of $220 million token unlock

Aptos price has been on a short-term downtrend which is probably going to continue a little longer due to not one but two factors. The first is the spot Bitcoin ETF approval, which might drive all the funds from altcoins into Bitcoin, and the other is token unlock, which is set to take place in the coming 48 hours.

Aptos token unlock

Aptos is set to note inflows of over 24.84 million APT tokens into the market on January 12, about one day and 21 hours from now. The nearly $220 million worth of token unlock represents about 8.04% of the entire circulating supply of Aptos.

Token unlocks are generally considered to be a bearish event since the market witnesses a surge in the supply of an asset. With the increase in supply and static demand, the value of the asset decreases, which generally results in the price going down. 

Aptos token unlock

Aptos is expected to observe a similar outcome as this is the second major token unlock in a month, as the last was noted on December 12 when a similar amount of APT entered the market.

Since the crypto market had just initiated a bullish recovery, the demand met the supply increase, and APT shot up by more than 16% in a day. But the same won’t happen this time around since the upcoming spot Bitcoin ETF approval will drive the flow of funds into BTC and away from altcoins, especially small-cap crypto assets.

Aptos price to decline further

Aptos price is already down by 20% on the week, falling from $10.02 to $8.37 at the time of writing. This correction resulted in APT losing the support of the 50-day Exponential Moving Average (EMA). 

If the aforementioned factors play into the bearish thesis, Aptos price will likely fall to test the support at $7.86, which is in line with the 100-day EMA as well as the 38.2% Fibonacci Retracement of $12.61 to $4.92. However, losing this support would result in further decline, with APT tagging the $6.73 support, marking another 20% correction. 

APT/USD 1-day chart

But if APT manages to bounce back from the $7.86 support, it might have a shot at reclaiming the 50-day EMA, which would push the altcoin beyond $8.77, invalidating the bearish thesis.