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Celestia’s price has continued to decline this week, reaching its lowest point since November 2023, ahead of a significant token unlock. The price of Celestia dropped to $4.15 on Sept. 10, marking an over 80% decrease from its highest level in February. This decline has reduced its market cap to approximately $868 million, down from $3.2 billion earlier this year.
This sell-off in Celestia occurred as Bitcoin and other altcoins lost momentum. Bitcoin has dropped by over 23% from its highest level this year, while Ether has fallen by 43%.
Impending Token Unlock
Celestia faces a major challenge with the upcoming token unlock, which will further dilute existing holders. Celestia has a maximum supply of 1 billion tokens, with 209 million currently in circulation. Over 859 million tokens have yet to enter the market.
On October 31, over 174 million tokens, worth more than $175 million or 16.4% of the total supply, will be unlocked. These tokens will be allocated to seed investors, initial core contributors, and Series A and B investors. The last token unlock occurred on October 31 last year, with the final unlock expected in October 2027.
Token unlocks typically result in more dilution by increasing the number of coins in circulation. In Celestia’s case, this will likely affect its staking yield, which currently stands at 9.96%.
Celestia’s staking revenue comes from transaction fees, block rewards, and data availability sampling fees. As more tokens are introduced into staking pools, the yield is expected to decline.
Market Share and Price Analysis
TIA’s token has also dropped even as the Celestia network has gained market share in the modular data industry. Data indicates that the platform’s share has risen to about 40%, while Ethereum Blobs holds a 58% share.
Celestia’s token has experienced a strong sell-off, falling from a peak of $21.30 in February to $4.12. It has dropped below the 78.6% Fibonacci Retracement point and the 50-day moving average. TIA has also formed strong support at $3.95, a level it has failed to break since July. This price represents the lower side of the descending triangle pattern, a common bearish signal.
As a result, Celestia is at risk of falling to a record low if it breaks below this important support level.
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