Celestia (TIA) Token Unlock Scheduled for October 31, 2024
In an analysis on X, Taran Sabharwal, CEO of Stix—an OTC trading platform specializing in liquidity solutions for private crypto transactions—discussed the upcoming unlock dynamics of the Celestia (TIA) token set for October 31, 2024. He suggests that the market may be underestimating the potential impact on TIA's price action into November.
Potential Factors Influencing TIA Investment
Sabharwal noted, "TIA – an OTC story." Utilizing on-chain data from @celenium_io API, he assessed the unlock dynamics and summarized that a total of 92.3 million TIA will be liquid post-unlock, which serves as the upper limit of overall spot selling pressure. This amount constitutes less than 50% of total cliff unlocks, indicating actual sell pressure could be only half of market expectations. The increase in circulating supply compared to current levels suggests a 41.8% dilution.
A key factor is the activity of OTC buyers who acquired large amounts during the initial unlock and hedged on perpetual futures, leading to increased open interest. "We expect many of these shorts to unwind, partially offsetting the spot-selling pressure," he stated. This unwinding could signal a bullish trend for spot buyers due to potential shifts in funding rates.
Sabharwal's analysis included several assumptions: OTC round buyers hold an 11 million TIA cliff unlock, categorized as non-staked tokens since they originated from treasury wallets not tracked by blockchain explorers. His team identified 292 vesting wallets but acknowledged some gaps in data, also classified as non-staked.
Reflecting on TIA's OTC history on Stix, he highlighted that Celestia has been among the most actively traded assets in the OTC market this cycle. Initially, it provided opportunities for directional buyers, while sellers sought to realize large profits without anticipating a bull market in Q3 2023. As TIA approached $20 in Q1 2024, OTC activity diminished as sellers resisted larger discounts and buyers held back bids above $8.5.
The situation shifted when TIA dropped below $5 coinciding with the Celestia Foundation's $100 million OTC round at $3. “The vesting for buyers mirrored that of private investors—33% unlock on October 31, 2024, and a 12-month linear unlock,” Sabharwal explained.
In the third and fourth quarters of 2024, aggressive OTC trading resumed, with Stix facilitating approximately $60 million in TIA volume since July. Total trading volume across all liquidity channels may exceed $80 million, assuming Stix captures a 75% market share in OTC transactions.
Summarizing his findings, Sabharwal stated: “TLDR: Shorts will unwind into the unlock, and funding rates may reset to zero or positive. Those who missed the October 9 unstaking deadline might have unstaked during October, increasing available supply going into November. The anticipated supply shock is significant, and this unlock has garnered considerable attention. Together with narrowing OTC discounts, this may lead to heightened activity for the coin.”
Crypto analyst Will Clemente also commented on the developments: “Great piece on $TIA OTC activity by Taran from Stix. TLDR: OTC discount to spot in the private market has compressed over the last year, reflecting growing demand ahead of the unlock. Stix alone has executed $60 million in TIA OTC volume since July.”
Clemente added his view on the market implications: “I believe recent BTC price movements reduce the likelihood of Thursday’s TIA unlock being bearish. Six months of reaccumulation following an 80% drop, substantial OTC volume, and the highly publicized nature of this unlock suggest a favorable outlook.”
At press time, TIA was priced at $5.00.
