Why did the price of TIA fall?

Celestia (TIA) dropped 0.74% in the last 24 hours, contributing to an 18.75% decline over the past week. The main reasons behind this drop are ongoing token unlocks, technical weakness in price trends, and a generally cautious market mood.

1. Token unlocks – More tokens entering the market daily increase selling pressure.
2. Technical breakdown – Price falling below important averages suggests sellers are in control.
3. Market-wide risk-off – Investors are cautious, favoring Bitcoin over alternative cryptocurrencies.

Deep Dive

1. Token Unlocks (Negative Impact)

Overview: In early September 2025, Celestia released 6.96 million TIA tokens (worth about $13 million). This was part of a larger wave where over $790 million in tokens were unlocked across various projects like SOL and DOGE (Cryptopotato). Daily unlocks of around 995,000 TIA will continue until late 2025.

What this means: When more tokens become available, supply increases faster than demand, which usually puts downward pressure on prices. This aligns with TIA’s 23% drop over the last 60 days, suggesting some holders might be selling their newly unlocked tokens.

What to watch: Upcoming unlocks of about 344,000 tokens per day starting November 2025, and whether growing demand—through staking or ecosystem development—can absorb this extra supply.

2. Technical Weakness (Bearish Momentum)

Overview: TIA is currently trading at $1.41, which is below key moving averages like the 7-day average ($1.52) and the 200-day average ($2.21). The Relative Strength Index (RSI-14) is at 36.37, indicating the token is oversold but hasn’t yet reversed course. The MACD indicator remains negative (-0.04), confirming downward momentum.

What this means: Traders see failed attempts to push the price higher—such as the rejection at $1.64—as signs that the price could drop further, possibly toward $1.30. Trading volume has decreased by 31% in the last 24 hours, showing less buying interest.

Key level: If the price closes below $1.34 (the low from September 27), losses could accelerate.

3. Market Sentiment Shift (Mixed Impact)

Overview: The overall crypto market is experiencing fear, with the Fear & Greed Index at 34/100. Bitcoin’s dominance has increased to 57.76%, pulling liquidity away from altcoins like TIA.

What this means: Investors are moving toward “safer” assets like Bitcoin and Ethereum amid uncertainty around things like Federal Reserve interest rate decisions. The altcoin season index dropped 11% over the week, indicating money is flowing out of riskier tokens.

Conclusion

TIA’s recent decline is due to a combination of tokenomics (unlock schedules), technical price weaknesses, and cautious market sentiment. While the token is oversold and could bounce back, a sustained recovery will likely depend on reduced selling pressure or positive developments like wider adoption of modular blockchain technology.

Key watch: Will TIA hold the $1.34 support level, or will Bitcoin’s dominance keep altcoins under pressure? Keep an eye on upcoming token unlocks and on-chain trading volume for signs of change.

What could affect the price of TIA?

Celestia’s price is caught between positive protocol upgrades and ongoing selling pressure.

1. Matcha Upgrade Benefits – Cuts inflation in half and expands cross-chain use (Positive)
2. Token Unlock Risks – Over $13 million worth of tokens unlocked this week (Negative)
3. Modular Blockchain Growth – Holds 50% market share in data availability with 30+ rollups (Mixed)

In-Depth Analysis

1. Matcha Upgrade: A Boost for Celestia (Positive)

What happened:
The recent Matcha upgrade lowers Celestia’s token inflation from 5% to 2.5% annually (CIP-41). This means fewer new tokens are created, making existing tokens more valuable over time. The upgrade also increases block size from 8MB to 128MB and removes restrictions on token transfers across different blockchains, allowing Celestia’s token (TIA) to be used more widely across networks.

Why it matters:
Lower inflation can attract investors who earn rewards by staking their tokens. Plus, with improved cross-chain capabilities, TIA could become a popular choice for decentralized applications on other blockchains like Solana or Arbitrum. However, competition remains from other projects like EigenDA.

2. Token Unlocks and Selling Pressure (Negative)

What happened:
This week, about 6.96 million TIA tokens (worth roughly $13 million at $1.41 each) were unlocked, part of a larger $790 million token unlock wave across the crypto market in September (Cryptopotato). Earlier, a major investor, Polychain, sold its remaining $62.5 million stake in July (The Block).

Why it matters:
Newly unlocked tokens increase the supply available for sale, which can push prices down, especially since TIA’s price has already dropped 92% from its all-time high. Additionally, low activity in decentralized finance (DeFi) on Celestia and modest daily protocol fees ($200) suggest limited demand to absorb this new supply.

3. Modular Blockchain Adoption: Mixed Signals

What happened:
Celestia supports over 30 rollups (layer-2 solutions) and controls about 50% of the data availability market. However, daily active users have plateaued around 400,000. The upcoming Lotus upgrade (expected in Q3 2025) will connect TIA with Ethereum and Solana blockchains through Hyperlane.

Why it matters:
If Ethereum’s new data format (EIP-4844 blobs) gains popularity, Celestia’s dominance in data availability could translate into more revenue. Still, TIA’s current market value of $1.15 billion assumes fast growth, which is uncertain given competition from projects like Avail and Near DA.

Conclusion

Celestia’s future depends on whether increased staking demand from lower inflation can offset selling pressure from token unlocks. Keep an eye on the TIA/Ethereum blobspace usage ratio after the Lotus upgrade—if adoption exceeds 15%, it could signal a positive turnaround. With the Relative Strength Index (RSI) at 29.5, indicating oversold conditions, the question remains: has the price already factored in the negative outlook, or is there deeper weakness ahead?

What are people saying about TIA?

The Celestia (TIA) community is divided between hopes for a price breakout and concerns about token unlocks. Here’s the latest:

1. Polychain’s $62.5 million exit before staking changes has raised fears of a selloff.
2. A breakout from a descending price channel points to a target of $4.20, but some are cautious, eyeing a possible drop to $1.30.
3. Nearly 995,000 TIA tokens are unlocking daily, which is putting downward pressure on the price.

In-Depth Look

1. Bullish Outlook: Breakout Above $6.20 Resistance

@VipRoseTr shared on September 10, 2025:
“Price targets: $2.20 → $4.20… the breakout that catches everyone sleeping”
View original post
What this means: Traders who are optimistic believe TIA is breaking out of a long-term downtrend. However, the $2.70 to $3.38 price range has historically seen heavy selling, which could limit gains (CoinMarketCap).

2. Bearish Concern: Token Unlock Overhang

@kerimcalender noted on September 6, 2025:
“995K TIA unlocks daily until November… Seed investors paid $0.01 vs. $1.41 now.”
View original post
What this means: A large number of tokens are being released daily, which could lead early investors to sell and put downward pressure on the price. Although daily unlocks will drop to 344,000 tokens by November, the current high volume of unlocked tokens is affecting market sentiment.

3. Institutional Move: Polychain’s $62.5M Exit

CoinMarketCap News reported on July 24, 2025:
“Foundation buys remaining stake pre-staking revamp… unlocks resume Aug 16.”
View original post
What this means: While private over-the-counter (OTC) sales help avoid sudden market dumps, Polychain’s exit signals some institutional caution ahead of upcoming protocol changes.

Conclusion

The outlook for Celestia (TIA) is mixed. Supporters point to a strong $1.50 support level and upcoming integration with Hyperlane, which could boost cross-chain capabilities (CoinMarketCap). On the other hand, skeptics warn that if token unlocks continue to outpace buying, the price could fall to $1.30 or lower. The key moment will be in November, when daily token unlocks drop significantly—a critical test for TIA’s supply and price stability.

What is the latest news about TIA?

Celestia is managing investor exits and technical improvements while facing market challenges. Here’s the latest update:

1. Polychain Exit & Buyback (July 24, 2025) – The Celestia Foundation bought $62.5 million worth of TIA tokens from Polychain and is redistributing them to new investors.
2. Upbit Suspension (August 1, 2025) – South Korea’s Upbit exchange temporarily stopped TIA deposits and withdrawals due to technical issues with blockchain nodes.
3. Lotus Upgrade (July 25, 2025) – Introduced new rules for staking rewards and added Hyperlane technology to enable communication with other blockchains.

Deep Dive

1. Polychain Exit & Buyback (July 24, 2025)

What happened:
The Celestia Foundation purchased 43.4 million TIA tokens from Polychain Capital for $62.5 million at $1.44 per token. This ends Polychain’s role as a major validator for Celestia. The tokens will be gradually given to new investors between August and November 2025. This move follows criticism of Polychain’s earlier sales of $242 million worth of TIA tokens earned from staking rewards.

Why it matters:
This reduces the risk of too much control by one investor and helps stabilize the token supply. However, because the tokens will be released slowly, it might delay positive price movement. This also supports the recent Lotus upgrade, which links staking rewards to token unlock schedules to discourage quick selling.
(CoinMarketCap)

2. Upbit Suspension (August 1, 2025)

What happened:
Upbit, a major South Korean exchange, temporarily stopped TIA deposits and withdrawals due to problems with blockchain nodes. Trading continued during this time, and services resumed once the issues were fixed.

Why it matters:
This caused short-term liquidity issues and price swings but didn’t have a lasting effect on TIA’s price. The incident highlights the importance of strong technical infrastructure as Celestia grows.
(CoinMarketCap)

3. Lotus Upgrade (July 25, 2025)

What happened:
The Lotus upgrade added Hyperlane technology, allowing Celestia to communicate with other blockchains like Ethereum and Solana. It also changed how staking rewards work: if your tokens are locked, your rewards are locked too.

Why it matters:
This helps reduce selling pressure from early investors and strengthens Celestia’s position in the growing modular blockchain space. However, locking rewards might discourage some people from staking in the short term.
(Celestia Blog)

Conclusion

Celestia is carefully handling investor exits, technical upgrades, and exchange challenges to keep its ecosystem stable. The Lotus upgrade and token redistribution aim to support long-term growth, but maintaining TIA’s $1.50 support level is key. Will the phased token releases and cross-chain features help overcome current market doubts?

What is expected in the development of TIA?

Celestia’s roadmap is focused on improving scalability, connecting different blockchains, and making its economy more sustainable. Here are the main milestones to watch for:

1. Matcha Upgrade (Q4 2025) – Increases block size to 128MB and lowers TIA token inflation to 2.5%.
2. Lotus Mainnet Integration (Late 2025) – Adds better cross-chain communication using Hyperlane.
3. Proof-of-Governance Proposal (2026) – Plans to change staking rules and token economics to encourage governance participation.

Deep Dive

1. Matcha Upgrade (Q4 2025)

Overview:
The Matcha upgrade, currently available on the Arabica testnet, will increase block sizes from 8MB to 128MB through CIP-38. This means the network can handle more data at once. It also cuts inflation in half, from 5% to 2.5% (CIP-41), and removes restrictions on which tokens can use the IBC/Hyperlane bridges (CIP-39), allowing any asset to move freely through Celestia.

What this means:

• Positive: Bigger blocks can support more rollups (layer-2 solutions), making TIA more useful as a payment token for data availability. Lower inflation means TIA tokens become scarcer, which can increase value.
• Potential downside: Larger blocks require more storage from nodes, which could lead to fewer people running nodes and more centralization.

2. Lotus Mainnet Integration (Late 2025)

Overview:
The Lotus upgrade will add Hyperlane as a built-in interoperability layer. This lets TIA tokens move easily between Ethereum, Solana, Cosmos, and other blockchains.

What this means:

• Positive: Easier movement of assets across chains could increase demand for TIA as a key routing token.
• Neutral: The success depends on how many other blockchains adopt Hyperlane.

3. Proof-of-Governance Proposal (2026)

Overview:
Co-founder John Adler’s Proof-of-Governance (PoG) proposal aims to link staking rewards directly to active participation in governance. It also plans to reduce token issuance to just 0.25% per year.

What this means:

• Positive: Lower inflation combined with rewards for governance could help stabilize TIA’s value over time.
• Potential downside: Validators might oppose the change if it significantly cuts their earnings.

Conclusion

Celestia’s roadmap is centered on making the network faster and more scalable (Matcha), better connected with other blockchains (Lotus), and economically sustainable (PoG). These upgrades could strengthen TIA’s role in the growing modular blockchain space. However, challenges like avoiding centralization as block sizes grow and getting validators on board with new rules will be important to watch.

How will Celestia balance scalability with decentralization as block sizes grow?

What updates are there in the TIA code base?

Celestia (TIA) has rolled out important updates to improve its scalability, token economics, and ability to work with other blockchains.

1. Matcha Upgrade (September 2025) – Allows bigger blocks (128MB), lowers inflation to 2.5%, and removes limits on moving tokens between chains.
2. Lotus Upgrade (June 2025) – Adds Hyperlane for better cross-chain connections and cuts inflation by 33%.
3. Proof-of-Governance Proposal (June 2025) – Suggests dropping token issuance from 5% to 0.25% to help increase TIA’s value over time.

Deep Dive

1. Matcha Upgrade (September 2025)

What it does: The Matcha upgrade increases Celestia’s block size to 128MB, which means it can handle more transactions at once, especially for rollups (a way to bundle transactions). Inflation is cut in half to 2.5%, making TIA tokens scarcer. It also opens up the ability to move any asset across chains using IBC and Hyperlane.

• Technical details: New methods let the network process larger data blocks (up to 512x512) and bigger transactions (up to 8MB).
• Tokenomics: Inflation drops from 5% to 2.5%, and validators (those who help secure the network) must take at least a 10% commission to keep them motivated.
  Why it matters: Bigger blocks mean Celestia can support more activity, and lower inflation helps maintain or increase TIA’s value over time. (Source)

2. Lotus Upgrade (June 2025)

What it does: Lotus adds Hyperlane technology, allowing TIA tokens to move seamlessly to other blockchains like Ethereum and Base. It also changes how staking rewards work by disabling automatic claims and locking rewards based on vesting schedules.

• Interoperability: TIA can now be transferred natively across multiple chains, improving its usefulness.
• Staking changes: Rewards are locked longer, which might limit how quickly holders can access them.
  Why it matters: This upgrade expands TIA’s reach but may reduce short-term liquidity for stakers. (Source)

3. Proof-of-Governance Proposal (June 2025)

What it does: A governance proposal (CIP-29) aims to drastically reduce the number of new TIA tokens created each year—from 5% down to 0.25%—and introduce a fee-burning system.

• Impact: If approved, this could make the total supply of TIA shrink over time, depending on how much the network is used.
  Why it matters: Lower token issuance can reduce selling pressure from staking rewards, potentially increasing TIA’s value in the long run. (Source)

Conclusion

Celestia is focusing on growing its network capacity with larger blocks, making its token economics more sustainable by lowering inflation, and improving cross-chain compatibility through Hyperlane. The proposed move to Proof-of-Governance could better align the interests of developers and token holders. As modular blockchains become more popular, these upgrades could help Celestia gain wider adoption.