This is the reason why the price of TIA is at risk of further loss after dropping 12% this week.

The price of Celestia (TIA) is currently fluctuating around 1.83 USD, falling two digits in the past week. Although it has recovered about 38% from the record low of 1.32 USD in June, this cryptocurrency has still lost up to 70% of its value over the past year and is down more than 91% from its historical peak of 20.9 USD set in February 2024.

The prolonged weakening raises the question: Will TIA continue to face sell-off pressure, or will new moves from the Celestia Foundation open up recovery opportunities?

Celestia Foundation buys back all TIA shares from Polychain Capital

In the context of the plummeting TIA price, many analysts point out that Polychain Capital – one of the earliest and largest investors in Celestia – is the main reason behind the strong selling pressure.

Celestia was once praised as a promising blockchain project when it launched its mainnet, but its poor performance over the past year has caused it to gradually fall behind the market average. In fact, an analyst on X referred to TIA as the "top predator VC token in the market."

After the sell-off, Polychain has finalized the agreement to transfer all 43,451,616.09 TIA to the Celestia Fund for a price of 62.5 million USD, while also proceeding to revoke the authorization of the staked assets to complete the deal.

Why is the price of TIA still falling?

Although the acquisition deal clearly demonstrates Celestia's determination to stabilize prices, the price of TIA continues to fall.

The causes are believed to stem from several key factors:

In response to the wave of criticism, Celestia announced a plan to restructure its tokenomics and governance model. According to a report from Chaos Labs, in addition to repurchasing all tokens from Polychain, the project also proposed reducing the inflation rate – a move aimed at alleviating long-term selling pressure and towards a more sustainable distribution mechanism.

However, analysts remain cautious. The big question still remains: are these adjustments enough to halt the sell-off and restore investor confidence?

Price analysis TIA

TIA started last week in the red, falling 1.97% to 1.85 USD. However, buying pressure quickly emerged: on Tuesday, TIA surged 6.53%, closing at 1.97 USD and continued to rise nearly 1% on Wednesday, finishing the session at 1.99 USD.

The increase stalled on Thursday as TIA fell 2.46%, closing at 1.94 USD, despite briefly surging to 2.11 USD. By the weekend, buyers regained the upper hand: on Saturday, the price increased nearly 2% to 1.99 USD, and on Sunday, TIA surged nearly 9%, surpassing the 2 USD mark, closing the session at 2.16 USD.

This week, TIA started with a 3.4% increase to 2.24 USD on Monday. However, selling pressure returned: on Tuesday, the price fell by 1.58% to 2.2 USD; on Wednesday, TIA lost more than 12%, dropping below 2 USD, closing at 1.93 USD, and on Thursday, the price continued to decrease by more than 6% to 1.81 USD. In the current session, TIA has slightly reversed, increasing by 1%, trading around 1.83 USD. Over the seven-day period, TIA has lost more than 12%.

TIA price chart 1 day | Source: TradingViewAt the time of writing, the open interest of TIA has fallen to 197 million USD.

Technical indicators on the daily frame show that the bears are gaining the upper hand. The RSI has slipped below the 50 threshold – a sign of weakening bullish momentum, while the MACD has shown a bearish crossover, reinforcing the negative signal for the short-term trend.

Emma