KAITO slides 11% – Will the 32.6M token unlock trigger more losses?

Kaito [KAITO] has been declining over the past few days. The asset has lost roughly 57% of its accumulated gains over the past week, a trend it has continued over the past day as it lost another 11% as of writing.

Notably, this downward performance, which has lasted more than a week, has been whale-driven. 

The whale retail delta remained around 0.242 on the chart, as whales possibly consider the asset overvalued and are selling it until it finds fair value.

Token unlock could have incentivized selling

A token unlock, a periodic event where more of an asset’s supply is released to the market to facilitate certain activities, including development and community benefits, is set to happen for Kaito.

The next token unlock is scheduled for the 20th of August, with 32.6 million KAITO tokens set to be released to the market, representing 3.26% of the token’s total supply.

Usually, when demand remains limited following an asset’s token unlock, its price tends to decline notably. A similar scenario could be the case for KAITO, especially as sentiment across the crypto market remains broadly bearish.

The assumption is that investors are selling their KAITO holdings ahead of the unlock to avoid absorbing larger losses after the unlock. The token holders chart has remained largely flat over the past week, implying that few new holders have entered the market to purchase KAITO.