Movement Labs' native token, MOVE, is under more downward pressure in the run-up to its May 9 token unlock.

Movement Labs' native token, MOVE, is under more downward pressure in the run-up to its May 9 token unlock. By Lucas Outumuro. Updated May 5, 2024 at 1:13 a.m. PDT.

Movement Labs’ native token, MOVE, is coming under more downward pressure in the run-up to its May 9 token unlock.

According to data from Tokenimist, 50 million Movement (MOVE) tokens, or 2% of the total supply, will be released into circulation on May 9. At current prices, these tokens are valued at about $8.46 million. As of May 5, 7.55 billion MOVE tokens, or 75.5% of the total supply, are locked.

The remaining 24.5%, or 2.45 billion MOVE, is already in circulation.

The unlock comes at a time when the token is already under intense scrutiny and negative market sentiment. MOVE has dropped 28.2% in the last seven days. The token has lost almost 55% of its value over the last 30 days, wiping out most of its previous gains.

The price has now dropped below a key support level of around $0.17, a zone that previously acted as a psychological floor for buyers. As of press time, MOVE is trading at approximately $0.169, down 0.54% on the day.

Market-making scandal

The token’s steep fall can be traced back to a market-making scandal that surfaced in early May. Movement Labs confirmed that Manche, a third-party market maker, has been suspended as inquiries into a possible manipulation scheme continue.

The incident began in December, when 66 million MOVE tokens were reportedly dumped by a shell company called Rentech, making $38 million.

Even though Rentech was initially presented as being affiliated with another popular market maker, Web3Port, the investigation revealed that Rentech had no digital footprint or clear backing.

In March, Binance notified the Movement Foundation and Movement Labs and froze the related funds. To lessen the harm, the foundation announced a $38 million token buyback and ended its partnership with the market maker. However, there are still questions about the extent of Movement’s core team’s involvement.

MOVE’s technical outlook remains poor. The token’s current price is below all of the major moving averages, and momentum indicators such as the moving average convergence divergence suggest that bearish pressure is still present. The relative strength index is below 30, indicating oversold conditions, but there isn’t yet a clear reversal pattern.

With Coinbase set to delist MOVE pairs on May 15, the upcoming token unlock may fuel further volatility. In the short term, MOVE might continue to be under pressure unless there is a noticeable change in sentiment or a strong recovery above key support levels.