AXS cryptocurrency of Axie Infinity is taking care of losses ahead of the planned opening on Sunday of millions of dollars worth of tokens based on the blockchain, play-to-earn project.
At press time, the price of AXS was $8.22, down 12% for the week, CoinDesk data shows. The cryptocurrency has a total value of $941.7 million, the third largest in the play-to-earn and gaming sector, behind market leader Decentraland’s MANA and The Sandbox’s SAND.
Data from TokenUnlocks shows that on April 23, Axie will release 18.89 million tokens, worth $ 155.27 million at the current rate, which is 7% of the total cryptocurrency supply of 270 million.
Axie started a staggered 65-month token unlock in 2020, and to date, 176.55 million tokens have been generated. The remaining 77.76 million will be opened by the end of 2025.
Unlocks are widely considered bearish catalysts. That’s because holders who benefit from the opening have a new ability to sell their coins, potentially increasing market supply. It is common in early stage projects to lock tokens to prevent large holders, usually early investors or members of the project team, from selling their coins at once and causing price drop.
However, unlocks don’t always lead to lower prices and in the past AXS has rallied ahead of the unlocking event. Additionally, the broader crypto market faced selling pressure this week, with leading cryptocurrencies bitcoin (BTC) and ether (ETH) losing 8% and 10%, respectively. Most play-to-ear and play tokens fall between 5% and 10%.
In other words, the decline in AXS, at least in part, seems to be driven by broader risk aversion.
Amid the AXS price drop, the dollar amount locked in futures tied to the token fell by nearly 20% to $44 million this week, according to data tracked by Coinglass.
The decline in both price and open interest suggests that the fall was caused primarily by the closing of strength positions rather than outright shorts or bearish bets.