Assessing ASTER’s price action after $1.37M token unlock — What’s next?

Aster (ASTER) has entered a decisive phase after its latest $1.37 million token unlock, with a majority of the newly released supply flowing into the ecosystem.

According to the unlock release reports, more than 70% of the unlocked tokens were allocated to ecosystem staking and airdrops. This added fresh supply as the altcoin’s price continued to trade near the lower end of its long-standing range.

Here, the timing is notable. Especially since it comes at a time when the price action has lacked the required volatility. 

Buybacks are absorbing supply, but will it be enough?

According to AMBCrypto’s recent report, 99% of protocol rewards have been directed towards token buybacks while unclaimed rewards have been recycled back into the ecosystem through airdrops.

At the same time, network usage has strengthened. On 29th July, for instance, Aster generated $341,000 in fees, marking its highest daily figure this month.

This combination suggested that demand within the protocol has been healthy, even as new tokens entered circulation. However, the key question is whether buybacks can absorb the additional supply quickly enough to prevent further downside.

Meanwhile, ASTER’s Weighted Funding Rates were still positive at press time with a reading of 0.0068%. This indicated that leveraged traders are still positioning for a potential recovery, despite the recent weakness in price.

Technicals support a potential bearish run continuation

From a technical perspective, ASTER seemed to be trapped inside the same range that has contained its price action since 9th February, fluctuating between $0.595 and $0.775.

At press time, the price was pressing against the lower boundary of that range while trading below all major Exponential Moving Averages. This suggested that sellers have continued to control the broader trend.

Consequently, the recent unlock could add to that pressure if newly released tokens find their way into the market.

That’s not all either as just below token’s press time trading price, a liquidation cluster worth more than $1 million sat near $0.58. This makes it the next major level to watch if the range support fails.

As it stands, unless buyers put more effort to defend the current floor, the anticipated bearish run could be close to certainty.

The combination of fresh supply, weak technical structure, and downside liquidity could pull ASTER towards its next area of interest at the liquidity zone.

Final Summary

• Aster released $1.37 million worth of tokens, with more than 70% allocated to the ecosystem and airdrops.
• ASTER has been testing the bottom of a six-month trading range, with the $0.58 liquidity cluster emerging as the next downside target.