VELO price has dropped over 13% in the past 7 days. With a major token unlock event set for late September, will the current losses continue?
Summary
- VELO price is down roughly 13% in the past 7 days.
- 3 billion VELO tokens are set to be unlocked this month.
According to data from crypto.news, Velo (VELO) was trading at $0.013 last check, Sep. 3 afternoon Asian time. At this price, it is down 13.4% over the past 7 days and 64% below its year-to-date high.
As per data from Token Unlocks, 3 billion VELO tokens, worth roughly $39.67 million, are set to be released into circulation at 12:00 AM UTC on Sep. 20. The unlocked figure represents about 17% of the circulating supply and approximately 12.5% of VELO’s total supply.
Out of the unlocked tokens, 900 million, valued at $11.9 million, will be allocated to founders, while the remaining 2.1 billion tokens will be released to the Velo development reserve.
Large-scale token unlocks tend to exert selling pressure, as investors often weigh the possibility of an open market sell-off. On top of that, if the related project fails to generate sufficient demand from investors to absorb the additional supply following the unlock event, that can amplify concerns.
VELO’s recent price decline could likely be hinting at such concerns among traders ahead of the token unlock event, which could lead to a steeper correction. Such preemptive selling can lead to weakness in the token’s price even before the actual unlock event occurs.
However, Velo could abate much of this selling pressure if it successfully generates additional demand for its token through any major development.
As such, the protocol has recently teased plans to launch stablecoins pegged to multiple Southeast Asian currencies, including Thai Baht (thb), Vietnamese Dong (vnd), Philippine Peso (php), and Indonesian Rupiah (idr).
If the planned rollout takes place, it could act as a catalyst driving renewed interest from investors and users alike. This, in turn, could help absorb some of the additional supply introduced by the upcoming token unlock, potentially offsetting selling pressure on the token.
On the daily chart, VELO has been trading within a descending parallel channel for nearly the past two weeks.
The token’s price has also dipped below all major moving averages. Typically, this means sellers are currently the dominating force influencing price action.
Momentum indicators such as the MACD and Relative Strength Index were also pointing downwards, with the RSI still far from oversold levels. This confirms that the short-term outlook remains bearish for the moment.
As such, VELO may continue to trend lower if it continues to trade within the descending channel.
Based on these technicals, the most likely target for Velo remains down at $0.0119, which has acted as a strong support area multiple times earlier this year. If the support fails to hold, a move towards $0.010, a psychological support level, may be on the table.
However, a bullish breakout above the upper boundary of the channel would invalidate this setup.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
