Sei, Starknet extend declines amid token unlock volatility

• Sei extends decline as $30 million token unlock risks diluting valuation.
• Starknet token unlock progress hits 21.3% of supply cap as 127.6 million STRK enter market.
• Token unlocks allow issuers to manage supply, incentivize stakeholders and fund development.

The cryptocurrency market faces price instability on Monday, led by Bitcoin (BTC), which is currently below $115,000. Sei (SEI) and Starknet (STRK) have not been spared the spike in volatility, which could be exacerbated by the respective token unlocks that occurred earlier in the day. 

Sei, a native Layer-1 protocol token, is trading at $0.3135, down over 5%, while Starknet, powering a decentralized Layer-2 ledger on Ethereum (ETH), hovers at $0.1313 at the time of writing.

Sei token unlock triggers price volatility 

The Sei network has completed a token unlock event, which resulted in the release of 95.15 million SEI, valued at approximately $30 million. The unlock accounts for 1.55% of the total market capitalization of $1.98 billion, according to CryptoRank data. 

So far, the network has released 72.4% of the total supply, approximately 7.24 billion SEI, with 2.76 billion SEI still vested. 

SEI token unlock | Source: CryptoQuant 

Following the unlock, the SEI price extended the decline from an intraday high of $0.3382 to $0.3135. Technical indicators on the daily chart below show that Sei is at risk of extending the decline.

A sharp drop in the Relative Strength Index (RSI) from 62 to 50 indicates fading bullish momentum. Lower RSI readings below the midline, heading towards oversold territory, could indicate the path of least resistance is downward.

SEI/USDT daily chart

Key levels traders should consider monitoring in the short term are the 50-day Exponential Moving Average (EMA) at $0.3064, the 200-day EMA at $0.9524 and the 200-day EMA at $0.2883, all of which could serve as tentative support levels if declines persist.

Starknet eyes 43% triangle breakout after token unlock

The Starknet protocol has released an additional 127.6 million STRK tokens, valued at $16.8 million, which have joined the circulating supply. According to CryptoRank data, this unlock event accounted for 3.13% of Starknet’s $537 million market capitalisation. With only 22.62% of the total supply unlocked, investors should brace for future supply shocks.

Starknet token unlock | Source: CryptoQuant

After the token unlock, Starknet experienced an increase in volatility, with the price fluctuating between an intraday high of $0.1453 and a low of $0.1295. The token currently holds above the 50-day EMA at $0.1303 while the 100-day EMA at $0.1360 caps upside action in the daily time frame.

STRK/USDT daily chart

A symmetrical triangle pattern in the same daily time frame shows that Starknet is consolidating ahead of a potential breakout. Price action below the ascending trendline could trigger a 44% bearish breakout to $0.0683.

Still, Starknet has the potential to post a significant recovery above the triangle. Such a move would follow a breakout above the descending trendline, projecting a 44% move to $0.2061. This target is determined by measuring the distance between the triangle’s widest points, extrapolating above the breakout point, as shown on the daily chart above.