Sui, Avalanche and TON Lead 2025 L1 Token Sell-Off — What Traders Should Know
Several layer-1 (L1) tokens — led by Sui (SUI), Avalanche (AVAX) and The Open Network (TON) — experienced sharp declines in 2025 as part of a broader L1 sell-off. The rout reflected a mix of profit-taking after earlier rallies, weakening on-chain activity for some networks, and rotation of capital back into Bitcoin and Ethereum. Key market signals included higher volatility, wider bid-ask spreads on exchanges for affected tokens, and elevated transfer volumes as holders rebalanced. Traders saw rapid price drops followed by short-lived rebounds on news and liquidity events. Market participants cited network-specific factors: Sui and TON faced cooling developer activity and token unlock schedules that increased circulating supply, while Avalanche suffered from reduced DeFi TVL and lower gas usage. The sell-off tightened funding rates on perpetual futures for several L1 tokens and prompted liquidations in over-leveraged positions. Short-term implications: expect continued volatility, potential short-squeeze opportunities, and trading windows around token unlocks and on-chain metrics. Long-term implications: fundamentals (developer activity, TVL, and real usage) will determine recovery trajectories; projects with sustained ecosystem growth could outperform, while networks failing to regain activity may remain under pressure. Traders should monitor token unlock calendars, on-chain usage metrics, funding rates, and macro flows into BTC/ETH for signals to enter or exit positions.
Bearish
The report of a 2025 L1 token dump led by SUI, AVAX and TON indicates a predominantly bearish near-term outlook. The decline was driven by profit-taking after prior rallies, token unlock schedules increasing circulating supply, and weakening on-chain activity (lower TVL and gas usage) — classic fundamentals-based downward pressure. Elevated volatility, tighter funding rates on perpetuals, and liquidations of leveraged longs signal continued downside risk until on-chain metrics and developer activity show sustained improvement. Historically, similar events (e.g., post-rally unwind after token unlocks in other L1 projects) produced extended consolidation or further declines before recovery — recovery generally required demonstrable increases in TVL, active addresses, or significant product launches. For traders: expect short-term opportunities for volatility trading (shorts, hedges, or event-driven longs around squeeze risks), but avoid directional long exposure without clear fundamental improvement. Monitor unlock calendars, funding rates, exchange order books, and BTC/ETH inflows as confirming indicators for trend exhaustion or reversal.