KAITO slides 11% as 32.6M token unlock looms over whale sell-off

KAITO fell 11 percent in the past day, erasing 57 percent of weekly gains as whale selling and a looming token unlock pressure the altcoin.

CoinGlass data shows the whale retail delta held near 0.242, indicating large holders consider the asset overvalued and are selling until it finds fair value.

The decline has persisted for more than a week. The next token unlock, scheduled for Aug. 20, will release 32.6 million KAITO tokens into the market, representing 3.26 percent of the token's total supply.

With demand limited and sentiment across the broader crypto market bearish, the unlock could add further selling pressure. The token holders chart has remained largely flat over the past week, implying few new holders have entered to absorb supply. Historically, tokens that see limited demand following an unlock tend to decline notably as the new supply hits the market.

Whale selling is partial, not a full exit

The assumption is that investors are selling KAITO holdings ahead of the unlock to avoid absorbing larger losses afterward. The flat token holders chart confirms whales are not completely exiting but are instead selling a portion of their wallets, possibly to maintain exposure to the asset.

This pattern mirrors a broader trend across the altcoin sector this month. Several projects, including Arbitrum and Aptos, are also scheduled to release locked supply in August, adding to the supply overhang that has weighed on smaller tokens as Bitcoin consolidates. For KAITO, the timing is particularly challenging given the already bearish market backdrop.

Liquidation gap warns long traders

Perpetual market data shows a clear warning for traders who remain bullish. At the time of writing, long positions recorded total liquidations of roughly $767,190, while short positions saw losses of $35,340 — a 21-fold gap. This disparity suggests optimistic traders may need to exercise caution before betting long on the asset.

The liquidation skew is consistent with the whale retail delta reading: both point to a market where large holders and leveraged longs are positioned on the same side of the trade, leaving little support if the unlock triggers another leg down.

For now, traders should treat the market with caution if they expect to take long positions. The combination of whale selling, a looming supply unlock, and bearish market conditions points to continued downside risk for KAITO in the near term. A failure to hold current levels could accelerate selling as the Aug. 20 unlock approaches, and the 21-fold liquidation gap suggests leveraged longs have little room to absorb further losses.

This article is for informational purposes only and does not constitute investment advice.