Token Unlocks: Sell Signals or Trading Opportunities?

Token unlocks are reoccurring events in the crypto sector. It’s almost impossible to prevent them. In general, token unlocks are part of each crypto project’s journey.

They also tend to work negatively on the project’s token price. However, that’s not always the case. Several factors in play can influence a token price during token unlocks. So, let’s take a closer look at what the deal is with these token unlocks.

Where Can You Find Information About Token Unlocks

You can find information about token unlocks on various platforms. Some samples are, for instance,

• Messari.
• DeFiLlama.
• Token Unlocks .
• CryptoRank and plenty more.

Source: Token Unlocks app

At Altcoin Buzz, we also have monthly videos in our YouTube channel about these unlocks. Here’s a link to our most recent video. Another interesting research tool is Messari’s recent report on token unlocks. In this report, Messari looked at 641 unlock events and their data. They included 41 assets and looked for patterns in market reactions.

The majority of unlocking events were with less than 2.5% of the circulating supply. Events that exceeded more than 5% were less than half of the researched projects. Unlocks in general hurt an asset’s price.

However, there can also be other factors at play. They can also influence the price of a crypto asset. These factors can override a token unlock event. For instance:

• Market sentiment.
• New product launches. 
• Shifts in narratives.

So, it can happen that despite a token unlock, the price of an asset appreciates. This is not unheard of. It also shows that you do not necessarily have to sell tokens before an unlock event. Since, selling tokens before an unlock event is an often-used tactic. You sell your tokens before an unlock event and buy them back at a lower price after the unlock.

Token Unlock Patterns

It’s possible to identify certain patterns in token unlock events. So, let’s take a closer look at this.

• An unlock of at least 5% of the circulating supply tends to have a notable impact on an asset’s price development.
• The moment when token prices dip, tend to be a week before and after a token unlock.
• There are factors that can override a negative price impact. For example, a new product launch or a sector outperforming an unlock.
• Expected large unlocks can have an unforeseen market reaction.
• Over the long term, tokens, with big monthly unlocks, tend to underperform. Altcoins without these monthly unlocks tend to perform better.

So, there’s no clear answer if you should before an unlock event. There are various market conditions and sentiments at work. For assets with upcoming unlock events, you need to be aware of them. See the picture below.

Upcoming Cliff Unlocks 

We also would like to give you an idea of upcoming cliff unlocks. These can be, at times, significant. Accordingly, they can have an impact on the price of these assets. So, let’s take a look, since you want to be aware of these unlock events.

• Celestia ($(TIA) has a big unlock event on 31st October. This will be a 31% supply increase. 
• Jito ($JTO) is due for a 108% unlock on 7th December. 
• Ondo Finance ($ONDO) has a 286% supply increase come 17th January 2025. That’s the biggest upcoming unlock event.
• Omni Network ($OMNI) has a 154% supply increase on 16th April 2025.

What is of interest here, is that unlock events can verify from project to project. Unlock events can be daily, weekly, monthly, or quarterly emissions. However, Ondo Finance has big yearly unlock events. See the picture below.

Source: DeFiLlama

Conclusion

Token unlocks are a part of the crypto sector. They can affect the price of crypto assets. In general, a token unlock most likely will depreciate a token price. However, that’s not always the case. So, it’s hard to predict what the best course of action is before a token unlock event. You need to look at market sentiment, or previous unlock price reactions.  There are also various other indicators in play. That’s where token unlock sites can come in handy.

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment and informational purposes only. Any information or strategies are thoughts and opinions relevant to accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours.

We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence.

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