Massive $441M Token Unlocks This Week, Threaten Altcoin Prices

Altcoin prices could come under pressure this week as investors react to the falling Altcoin Season Index and the upcoming token unlocks. However, there are more technical and fundamental catalysts that may drive them substantially higher in the fourth quarter.

Altcoin Prices Brace for Major Token Unlocks

One of the major catalysts for cryptocurrencies this week is that some big names will unlock their tokens, increasing the supply at a time when investors are staying on the sidelines after the substantially high liquidations last week.

Data compiled by Tokenomics shows that cryptocurrencies will unlock tokens worth over $441 million in the next 7 days.

Sui, the giant cryptocurrency valued at over $11 billion, will unlock tokens worth $142 million as part of its monthly releases. It now has 3.56 billion tokens in circulation against a maximum supply of 10 billion.

Ethena will unlock tokens worth $120 million, while EigenLayer will unlock coins worth $20 million. The other notable cryptocurrencies that will unlock tokens this week are Treehouse, Celo, and dYdX.

Crypto unlocks are often seen as being bearish catalysts for the industry because they boost the inflation by increasing the amount of tokens in circulation. However, in many instances, cryptocurrencies tend to ignore the unlocks since market participants have priced in them.

US Non-Farm Payrolls Data is a Bigger Risk than Token Unlocks

While the upcoming token unlocks pose a major risk to the crypto market, the main catalyst to focus on will be the US non-farm payrolls (NFP) report on Friday and the ADP private payrolls report on Wednesday.

These numbers are significant for the crypto market due to their influence on the Federal Reserve’s interest rate decision.

Data compiled by TradingEconomics expect the data to show that the private sector created 50,000 jobs in September, following the addition of 54,000 jobs in August.

The numbers also show that the official non-farm payrolls rose by 50,000 in September after rising by 22,000 in the previous month.

These jobs numbers are important because of their impact on the Federal Reserve. The Fed slashed interest rates by 0.25% in the last meeting and hinted of more cuts later this year.

However, some senior officials, including Jerome Powell, have warned that they were still focusing on the substantially high inflation rate. As such, altcoin prices are likely to continue their recovery if the US releases weak job numbers, as this will raise the odds of a cut in October.

The odds of a rate cut may also increase if the US government shuts down when funding runs out this week. A shutdown, depending on its duration, may impact GDP growth and pressure the Fed to cut rates.

Altcoin ETF Approval to Ameliorate the Unlock Risk

Meanwhile, cryptocurrencies have another bullish catalyst that may push them higher as the fourth quarter starts: regulations.

One of the main regulatory stories will be the approval of spot crypto ETFs by the Securities and Exchange Commission (SEC). After several delays, the SEC set October as the final deadline for some top cryptocurrencies like XRP and Solana.

Polymarket trades have boosted the odds that the agency will approve these ETFs as the already-approved ones like Bitcoin and Ethereum have now attracted about $70 billion in assets from investors.

Additionally, rejecting these ETF filings will likely prompt fund managers to consider the Investment Company Act of 1940 as an alternative means of launching their funds. REX-Osprey has already launched several funds on XRP, Solana, and Dogecoin using this approach.

The other regulatory stories that could boost crypto prices include the potential approval of crypto investments by retirement funds in the United States. Such a move would expose the industry to trillions of dollars in assets.

Summary

Altcoin prices could come under pressure this week as top cryptocurrencies like Ethena, Sui, and EigenLayer unlock millions of their tokens. However, the crypto industry has other potential opportunities, including the upcoming US non-farm payrolls (NFP) data and ETF approvals.