Why did the price of TIA fall?

Celestia (TIA) dropped 1.78% in the last 24 hours to $1.37, underperforming the overall crypto market, which fell just 0.17%. The main reasons for this decline are:

1. Technical weakness – The price is below important moving averages, like the 7-day average at $1.41.
2. Token unlock pressure – $13 million worth of TIA tokens became available on September 22, increasing selling pressure.
3. Market risk-off mood – Despite a Federal Reserve interest rate cut, crypto sentiment didn’t improve, leading to sell-offs in alternative coins.

Deep Dive

1. Bearish Technical Setup (Mixed Effects)

Overview:
TIA is trading below key moving averages, including the 7-day average at $1.41 and the 30-day average at $1.62. Momentum indicators like the RSI (Relative Strength Index) are low at 28.25, signaling the coin is oversold but not yet showing signs of a rebound. The MACD (Moving Average Convergence Divergence) remains negative, confirming downward pressure.

What this means:
Traders see the failure to rise above $1.40 as a sign that the downtrend may continue. The $1.79 level, based on Fibonacci retracement, now acts as strong resistance. Until TIA breaks above $1.50 (the 200-day exponential moving average), automated selling may keep the price under pressure.

What to watch:
If TIA closes above $1.45 in a day, it could trigger short sellers to buy back, pushing the price up. But if it falls below $1.30, the decline could speed up.

2. Token Unlock Impact (Bearish)

Overview:
On September 22, 6.96 million TIA tokens, worth about $13 million, were unlocked and added to the circulating supply. Although this is a small increase (about 0.9%), it happened during a weak market period (Crypto.news).

What this means:
Early investors and team members often sell unlocked tokens, especially when prices are low. This likely added to the selling pressure as holders tried to limit losses.

Conclusion

TIA’s recent drop is due to technical weakness, increased supply from token unlocks, and a cautious crypto market overall. While the coin is oversold and might see some short-term relief, a sustained recovery will likely need either a broader market rebound or positive developments, such as more projects using Celestia’s data layer technology.

Key level to watch: Can TIA hold above the September 29 low of $1.34? If it falls below this, the next target could be the 2025 low near $1.30.

What could affect the price of TIA?

Celestia’s price is balancing between upcoming protocol upgrades and challenges from token supply changes.

1. Matcha Upgrade Impact – Improvements in scaling and a 2.5% cut in inflation could increase Celestia’s usefulness.
2. Token Unlock Pressure – A $13 million token release in September 2025 could lead to price drops due to increased supply.
3. Modular Ecosystem Growth – Integration with Solana’s Bullet Layer 2 tests demand for Celestia’s data availability services.

Deep Dive

1. Protocol Upgrade Catalysts (Positive Outlook)

Overview: The Matcha upgrade increases block size from 8MB to 128MB, reduces Celestia’s token inflation from 5% to 2.5%, and removes restrictions on cross-chain assets using IBC/Hyperlane technology. This makes Celestia a more scalable platform for rollups—specialized blockchain layers that rely on fast and affordable data availability (DA).

What this means: Lower inflation means fewer new tokens entering the market, which can support price stability or growth over time. Larger blocks allow more data to be processed, attracting more rollups. Historically, a 1% increase in DA market share has been linked to about a 0.8% rise in Celestia’s token price (Token Terminal).

2. Token Unlock & Supply Risks (Potential Downside)

Overview: Celestia will see $13 million worth of tokens unlocked on September 22, 2025, which is about 0.9% of its total supply. This is part of a larger wave of crypto token unlocks totaling $517 million that week. Past unlock events, like the 6.96 million TIA tokens unlocked on September 1, caused price drops of 4-6% within two days (CryptoPotato).

What this means: When tokens become available for sale, it often increases selling pressure and can push prices down. The 30-day correlation between unlock volume and price for TIA is -0.72, indicating a strong negative relationship. However, the Celestia foundation’s recent $62.5 million token buyback (The Block) might help reduce the impact.

3. Modular Ecosystem Growth (Mixed Signals)

Overview: Solana’s Layer 2 solution, Bullet, plans to use Celestia’s data availability on its mainnet launch in late 2025 (Blockworks). This could validate Celestia’s role in the modular blockchain space. However, other data availability layers like Avail and EigenDA are competing for market share.

What this means: If Bullet succeeds, it could increase demand for Celestia’s data space, especially since Bullet aims for very low latency (1.2 milliseconds compared to Solana’s 400 milliseconds). But Celestia’s market share in data availability dropped from 58% to 49% in the third quarter of 2025 (Artemis), showing growing competition.

Conclusion

Celestia’s future depends on whether the benefits of the Matcha upgrade can outweigh the selling pressure from token unlocks. The modular blockchain ecosystem is at a critical point, needing real-world adoption to prove its value. With the Relative Strength Index (RSI) at 35.23—close to the oversold level of 30—there could be a price rebound if support holds at $1.34. The key questions are: Will Bullet’s mainnet launch drive a surge in demand for Celestia’s data availability, or will token unlocks continue to weigh on the price, extending the recent 14.3% decline over 90 days? Keep an eye on how the market absorbs the September 22 unlock and the performance of the Matcha upgrade after launch.

What are people saying about TIA?

Conversations around Celestia (TIA) are swinging between hopes for a price breakout and concerns about token unlocks. Here’s what’s trending right now:

1. Polychain’s $62.5 million TIA sale raises worries about increased supply
2. The 20-day Simple Moving Average (SMA) is key to short-term price direction
3. A proposal to cut inflation is generating cautious optimism
4. A $4.20 price target is being discussed if the price breaks out of a downward channel

Deep Dive

1. Polychain’s $62.5M TIA sale signals short-term bearishness

According to @kerimcalender, Polychain recently sold its remaining $62.5 million stake in TIA back to the Celestia Foundation ahead of upcoming staking changes. This news was shared by @CoinMarketCap Alert on July 24, 2025.
What this means: This large sale adds more TIA tokens into circulation—about 995,000 TIA per day until August—which can put downward pressure on the price in the near term. However, since the Celestia Foundation is absorbing these tokens, the market impact might be somewhat limited.

2. The 20-day SMA is a key price battleground

@CMC_TA from CoinMarketCap points out that TIA’s ability to stay above its 20-day SMA, currently around $1.64, is crucial for momentum. The price briefly rose above this level on Sunday but then pulled back by about 2.47%.
What this means: If TIA holds support around $1.50, the outlook is cautiously positive. But if it falls below that, the price could retest lows near $1.30 seen in June.

3. Inflation-cut proposal brings long-term optimism

The Celestia Foundation officially proposed reducing TIA’s inflation rate from 5% to 0.25% to protect tokenholder value. This was announced on June 23, 2025.
What this means: Lowering inflation is generally good for the token’s value over time. However, reducing staking rewards might discourage some validators, which could affect network security or participation.

4. $4.20 breakout target is speculative but bullish

Trader @VipRoseTr highlighted a potential breakout target of $4.20 if TIA breaks out of its current descending price channel. This was shared on September 10, 2025.
What this means: While this target suggests a strong upside, the current price of $1.37 is about 68% below the breakout level, meaning the price would need to rally over 200% to reach it. This makes it a high-risk, high-reward scenario.

Conclusion

The outlook for Celestia (TIA) is mixed. On one hand, the proposed inflation cut addresses long-term concerns, but on the other, daily token unlocks and recent price resistance keep selling pressure alive. The 20-day SMA at $1.64 is a critical level to watch this week—holding above it could signal a positive shift. For investors willing to take risks, TIA’s significant drop from its all-time high offers potential upside, especially if you believe in Celestia’s modular blockchain approach beyond the current unlock-related noise.

What is the latest news about TIA?

Celestia is managing new partnerships and token releases while dealing with a shaky market. Here’s the latest:

1. Solana Layer 2 Chooses Celestia (Sept 29, 2025) – Bullet’s appchain will use TIA to support faster and scalable perpetuals trading.
2. $13 Million TIA Tokens Released (Sept 22, 2025) – About 0.9% of the total supply entered the market during a time of overall selling pressure.
3. TIA Hits Lowest Price This Month (Sept 22, 2025) – Despite Federal Reserve interest rate cuts, bearish sentiment pushed the price down.

In-Depth Look

1. Solana Layer 2 Chooses Celestia (Sept 29, 2025)

Summary: Bullet, formerly known as Zeta Markets, announced that its new Solana-based Layer 2 solution will use Celestia for data availability. This aims to compete with centralized exchanges in perpetual futures trading. The platform targets very low latency (1.2 milliseconds) and plans to integrate zero-knowledge proofs to solve Solana’s past congestion problems.

Why it matters: This is positive news for TIA because it shows growing demand for modular data availability solutions like Celestia. Bullet’s mainnet launch is expected by late 2025. However, the project’s success depends on gaining users beyond specialized derivatives traders.
(Blockworks)

2. $13 Million TIA Tokens Released (Sept 22, 2025)

Summary: Celestia unlocked 6.96 million TIA tokens, worth about $13 million. This was part of a larger $517 million token release across several major crypto projects that week. Although smaller than Solana’s $115 million unlock, it still adds selling pressure during a weak market.

Why it matters: This event is neutral to slightly negative in the short term because token unlocks often lead to price drops. However, since TIA’s price had already fallen 12.7% over the previous 30 days, some of this impact may already be reflected in the market.
(Crypto.News)

3. TIA Hits Lowest Price This Month (Sept 22, 2025)

Summary: TIA’s price dropped to $1.37, the lowest since August, amid a $1.5 billion crypto liquidation event. Even though the Federal Reserve cut interest rates, altcoins like TIA underperformed Bitcoin. Futures funding rates turned negative, signaling bearish sentiment.

Why it matters: The near-term outlook is bearish, but technical indicators like the Relative Strength Index (RSI) suggest the token might be oversold and could see some price relief if Bitcoin stabilizes. The failure to hold support at $1.50 increases the risk of further declines toward $1.30.
(CoinDesk)

Conclusion

Celestia is facing mixed signals. On one hand, Bullet’s adoption of Celestia’s Layer 2 solution is a positive sign. On the other, token unlocks and broader market sell-offs are creating downward pressure. With TIA down 75% over the past year, it remains to be seen if Celestia’s focus on modular data availability can overcome inflation concerns and shifts in altcoin interest. Keep an eye on adoption numbers for Layer 2 solutions and any changes in staking behavior in the coming months.

What is expected in the development of TIA?

Celestia’s development is progressing with these key updates:

1. Lotus Upgrade (Q3 2025) – Completes improvements for cross-chain compatibility and updates staking rules.
2. Proof-of-Governance Model (Q4 2025) – Cuts token inflation from 5% to 0.25% to better align incentives.
3. Token Buyback & Redistribution (August–November 2025) – Stabilizes token supply by reallocating holdings from large investors.

Deep Dive

1. Lotus Upgrade (Q3 2025)

Overview
The Lotus upgrade, now running on the Mocha testnet, adds Hyperlane technology to enable communication between Celestia and other blockchains like Ethereum, Solana, and Cosmos. It also stops automatic claiming of staking rewards and lowers TIA token inflation by one-third (Celestia Blog).

What this means

• Positive: Makes TIA more useful as a gas token across multiple blockchains and reduces selling pressure by locking staking rewards.
• Risks: The technical complexity might delay the full launch on the main network past Q3.

2. Proof-of-Governance Model (Q4 2025)

Overview
Proposed by Celestia co-founder John Adler, this new model plans to cut the yearly token issuance from 5% down to 0.25%, while keeping the network secure. It replaces liquid staking derivatives (LSTs) with direct participation in governance (Binance Square).

What this means

• Positive: Supports long-term value growth for TIA holders by reducing inflation.
• Negative: Validators might resist the lower rewards, causing short-term uncertainty.

3. Token Buyback & Redistribution (August–November 2025)

Overview
The Celestia Foundation bought back 43.45 million TIA tokens (worth $62.5 million) from Polychain Capital. These tokens will be gradually redistributed to new investors to spread out ownership and reduce the risk of large sell-offs (CoinMarketCap News).

What this means

• Neutral: Prevents sudden token dilution but introduces a slow release of tokens over time.
• Key metric: Daily unlocked tokens will decrease from 995,000 to 344,000 by November.

Conclusion

Celestia’s roadmap combines technical upgrades (Lotus), improved token economics (Proof-of-Governance), and investor reshuffling to strengthen its position in modular data availability. While these steps are promising for adoption, there are risks in executing inflation cuts and managing token unlocks. Will lower token issuance balance out the drop in network fees (around $200/day as of July 2025)? Keep an eye on demand for data space and validator activity for clues on future direction.

What updates are there in the TIA code base?

Celestia’s latest updates focus on improving staking rewards, managing token supply, and enabling better communication between different blockchains.

1. Staking Reward Lock (July 25, 2025) – Introduced a system that locks a portion of staking rewards based on how many tokens a user has locked, helping reduce quick sell-offs.
2. Proof-of-Governance Proposal (June 23, 2025) – Suggested cutting new token issuance by 95% to control inflation.
3. Hyperlane Integration (May 24, 2025) – Added cross-chain compatibility, allowing Celestia to work smoothly with Ethereum, Solana, and Cosmos networks.

Deep Dive

1. Staking Reward Lock (July 25, 2025)

What happened: The Lotus upgrade added a feature that ties staking rewards to how many tokens a user has locked. For example, if half of your tokens are locked, you can only access half of your staking rewards.

This change aims to prevent early investors and validators from quickly selling their rewards, which previously caused inflation and price drops. The lock applies to all stakers, including big players like Polychain Capital, which sold $62.5 million worth of TIA just before this update (Source).

Why it matters: This is good news for Celestia (TIA) because it reduces the chance of large holders flooding the market with tokens, which can stabilize prices. However, smaller holders who rely on staking rewards might see less immediate access to their earnings.

2. Proof-of-Governance Proposal (June 23, 2025)

What happened: Celestia co-founder John Adler proposed switching from traditional staking rewards to a Proof-of-Governance (PoG) system. This would cut the yearly token issuance from 5% down to 0.25%, aiming to reduce inflation and reward long-term holders.

The idea is that lowering inflation could make TIA more valuable over time while still keeping the network secure. This proposal comes after TIA’s price dropped 92% from its high in 2024 (Source).

Why it matters: This change could be positive by making TIA scarcer and more attractive to investors. But there’s a risk that validators might leave if rewards become too low, which could affect network security.

3. Hyperlane Integration (May 24, 2025)

What happened: The Lotus upgrade also added Hyperlane’s interoperability protocol. This lets Celestia move tokens and data seamlessly between Ethereum, Solana, and Cosmos blockchains. Developers can now build Celestia rollups that interact directly with these networks without needing bridges.

This makes Celestia a strong player in the cross-chain space, competing with projects like Polkadot and Cosmos. Hyperlane’s “modular security” lets chains share validator groups if they choose (Source).

Why it matters: This is a big plus for TIA because better cross-chain compatibility can attract developers building multi-chain apps, increasing demand for Celestia’s services.

Conclusion

Celestia’s recent updates aim to strengthen the network by tightening token supply controls and expanding its usefulness across different blockchains. The staking reward lock and Proof-of-Governance proposal work to reduce inflation, while Hyperlane integration boosts Celestia’s role in the growing multi-chain ecosystem.

The key question now is whether these changes will attract more committed holders or discourage participation from validators. Keeping an eye on validator activity and how many tokens are burned after these updates will be important to watch.