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In an analysis shared on X, Taran Sabharwal, CEO of Stix – a leading OTC trading platform specializing in liquidity solutions for private cryptocurrency transactions –available An insight into the upcoming unlock dynamics of the Celestia Token (TIA) scheduled to take place on October 31, 2024. His assessment suggests that the market may be underestimating the potential impact on TIA’s price movement ahead of November.
Why Buy Celestia (TIA)?
“TIA – the OTC story,” Sabharwal began. “We’ve used on-chain data (via the @celenium_io API) to judge exactly how the PA unlock dynamics will shape the TIA as of November. The results are in the table above. We’ve summarized that a total of 92.3 million TIAs will be liquid after the unlock, which will be Acts as an upper bound on overall spot selling pressure.”
Interestingly, this number represents less than 50% of the total cliff opens, suggesting that the actual selling pressure may only be half of what the market expected. The real increase in circulating supply compared to current supply indicates a 41.8% decline, Sabharwal noted.
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An important factor in this dynamic is the activity of over-the-counter buyers who took large amounts of the initial open and hedged perpetual futures contracts, causing open interest to rise in recent months. “We expect many of these positions to continue to decline, partially negating immediate selling pressures,” he explained. This unwinding could serve as a bullish signal for spot buyers due to a potential reset in financing rates.
Sabharwal’s analysis included several key assumptions. Buyers in the OTC round hold 11 million TIA cliff unlocks, which are included in the category of unstaking tokens since these tokens originated from treasury wallets that are not flagged in the blockchain explorer. His team charted a total of 292 maturity portfolios, but acknowledged some loopholes, which were also included in the non-betting category.
Given Stix’s OTC TIA history, Sabharwal notes that Celestia has been one of the most actively traded assets in the OTC market this cycle. Early in the cycle, it presented an attractive opportunity for directional buyers, while sellers were eager to cash in on large unrealized profits without anticipating an imminent bull market in Q3 2023.
He continued: “In the first quarter of 2024, the bull market had matured and the TIA had risen to over $20. OTC activity was minimal here as sellers did not want to take deeper discounts (40+%) and buyers did not want to place bids higher than the maximum of $8.5. We saw almost no activity, as sellers were ‘feeling’ rich and wanted to continue to take risks, even though they had the opportunity to make 100-800 times their investment.”
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The dynamics changed when the TIA fell below $5. This was around the time that Celestia Foundation began raising its $100 million OTC round at $3. “The entitlement to buyers was the same as that of private investors, with 33% open on October 31, 2024 (less than two months into the round) and a linear open of 12 months,” Sabharwal noted.
During the third and fourth quarters of 2024, OTC trading activity resumed strongly, with sellers unloading various positions. Stix alone has facilitated approximately $60 million in TIA volume since July, suggesting total trading volume could exceed $80 million across all liquidity channels, assuming Stix holds a 75% market share in the OTC space.
Summarizing his analysis, Sabharwal concluded: “TLDR: Shorts will continue to decline at the open and funding rates may reset to 0 or positive. Those who missed the unspecified deadline on October 9th may also be unsettled during October, making “It causes a surge in spot supply in November. Either way, the supply shock is massive and has been the most broadcast open of the cycle and this, coupled with the suppression of OTC discounts, could create a lot of movement for the coin.”
Famous cryptocurrency analyst Will Clemente too Weighed in On the developments via TIA OTC since July.
Clemente added his take on the potential impact on the market: “I think this BTC price action has reduced the likelihood that Thursday’s TIA open will be bearish towards ‘no.'” 6 months of reaccumulation after withdrawing 80%, tons of OTC volume, open The most widely spread telegram in the history of cryptocurrencies, 9 fig short, BTC approaches ATHs i long rn.
At press time, TIA was trading at $5.00.
Featured image created with DALL.E, a chart from TradingView.com
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