fxstreet.com
- Celestia's 176 million unlocked TIA tokens are causing FUD among investors.
- Taran Sabharwal clarified that not all unlocked tokens will immediately be available for sale.
- TIA could trigger a massive correction if it fails to bounce off the $4.506 support level.
Celestia (TIA) is down about 9% following increased negative sentiment surrounding its cliff unlock, which is worth about 176 million TIA tokens. The token could see a correction if it fails to bounce off the $4.506 level.
TIA unlock stirs FUD among investors
Celestia unlocked 176 million TIA on Wednesday in a cliff unlock representing 80% of its current supply.
Cliff unlocks are events where a crypto project releases vested tokens to investors, community members or advisors after a lockup period. It can lead to sharp price declines in a token if demand fails to catch up with the new supply.
Several crypto community members have expressed FUD (fear, uncertainty, and doubt) following the unlock, leading to TIA diving over 9% in the past 24 hours. The price decline stretched its weekly losses to 15.5%.
While investors expect more selling pressure in the coming days, Taran Sabharwal, CEO of Stix trading platform, clarified in an X post on Tuesday that not all 176 million unlocked TIA will immediately be available for sale.
He noted that Celestia has a 21-day unstaking period, and those who intended to sell their unlocked TIA tokens have already unstaked. Hence, the potential total TIA selling pressure from the unlock is 92.3 million TIA, which is approximately $460 million.
"What is also interesting here is that this accounts for <50% of the total cliff unlocks, which means that the sell pressure is half of what people have been expecting," Sabharwal added.
Celestia Price Forecast: TIA could face correction if it fails to bounce off key level
TIA has crossed below the convergence of its 50-day and 200-day Simple Moving Averages (SMAs) and is looking to test the $4.506 support level. A bounce off this level could see TIA aim to test the descending trendline resistance extending from June 3.
TIA/USDT daily chart
A sustained move above this level could see TIA rising toward $6.874, especially as the 50-day SMA is attempting a golden cross move above the 200-day SMA.
However, if the $4.506 support fails to hold, TIA could move toward $3.722. A daily candlestick close below this level will trigger massive sell pressure.
The Relative Strength Index (RSI) is trending downward below its midline and the Stochastic has entered its oversold region, indicating rising selling pressure.