The modular blockchain network Celestia has initiated a significant release of its native token, TIA, which is currently valued at approximately $890 million. As of this writing, TIA has declined nearly 20% over the past week and is down 77% from its peak value, coinciding with the unlock event.

Typically, token unlocks are interpreted as bearish for a cryptocurrency because they suggest an increase in available supply for selling. However, these events do not always lead to market corrections or crashes; in some cases, they can even precede upward price movements.

In Celestia’s situation, around 175 million tokens that were previously locked will now be allocated to core contributors, early investors, and seed investors, effectively doubling the circulating supply of TIA. Crypto analyst Will Clemente argues that the concerns surrounding the TIA unlock are exaggerated, noting that much of the selling pressure is being absorbed by over-the-counter (OTC) investors who are eager to establish positions following a lengthy period of reaccumulation.

“I think the recent BTC price trends have reduced the likelihood of Thursday’s TIA unlock being bearish,” Clemente stated. “After six months of reaccumulation following an 80% decline, a significant amount of OTC activity, and the most anticipated unlock in crypto history, with short positions in the nine figures, I believe BTC is approaching all-time highs. I’m currently holding a long position.”

Source: Will Clemente/X

Chris Burniske, a partner at the venture capital firm Placeholder, recently reaffirmed his confidence in Celestia despite the unlock and indicated that any TIA price below $5 presents a prime opportunity for bullish investors. He elaborated on several key points:

1. The Celestia ecosystem is thriving, supported by a dedicated and diverse group of builders who are innovating with enthusiasm. This energy is reminiscent of the early days of Bitcoin, Ethereum, and Solana.
2. The so-called “evil VCs” receiving liquidity are unlikely to sell as expected in October, as they recognize the ecosystem’s growing traction and the ambitions of the development team. Many of TIA’s significant backers have a longer-term perspective than is commonly assumed.
3. Once the unlock occurs, it is probable that the market will realize there is less selling pressure than these short sellers anticipate, leading to a potential squeeze if they haven’t already exited their positions.
4. Buyers who have been on the sidelines, concerned about the potential impact of the unlock, will likely gain confidence from positive price movements and reduced uncertainty, prompting them to act.
5. The TIA market may break free from its current state of semi-paralysis.

At the time of this writing, TIA is trading at $4.76.

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Featured Image: Shutterstock/Marcelo.mg.photos/Natalia Siiatovskaia