Altcoin Selling Pressure Looms as $500M in Token Unlocks Scheduled This Week

As a seasoned researcher with a knack for navigating the volatile world of cryptocurrencies, I’ve seen my fair share of market fluctuations, and this upcoming unlock event is certainly one to keep an eye on. With approximately $500 million worth of tokens set to hit the market in the next week, it’s reasonable to expect a potential downward pressure on prices due to increased supply.

Approximately $500 million in assorted tokens is set to be distributed to investors, project teams, and advisors within the ecosystem this week, which could lead to a drop in prices for these digital assets due to increased supply.

As a researcher, I’m sharing an update about the emission rate of our WLD tokens, which determines the creation of new tokens over time. This increase, amounting to approximately 37 million tokens, will boost the total token supply by around 7%. The distributed tokens are earmarked for team members, advisors, and investors who have been instrumental in our project’s development.

Layer 2 network Taiko’s $18 million unlock will be the most by supply at 15% of its total.

As a crypto investor, I’ve learned that out of the $500 million worth of unlocks, there’s a massive release of tokens valued at approximately $200 million coming up. This is often referred to as a “cliff” – a term used for a huge amount of tokens being unleashed all at once.

As a researcher, I find that unlocking mechanisms boost the overall circulating amount of a specific token, yet this surge may not instantly flood the open market. Instead, it’s important to understand that these tokens could be subject to vesting schedules or other distribution timelines, which can influence when and how they enter the market.

In simple terms, when token recipients are expected to immediately sell their newly acquired tokens, this could trigger a premature sell-off among investors and traders, causing the token’s price to decrease before or during the time the tokens become accessible.

According to a study conducted in 2023 by TheTie, it’s common for the majority of losses due to unlocking to occur approximately two weeks following the associated event.

If the market views the unlock as a symbol of project advancement or anticipates using the tokens for staking, governance, or other purposes that don’t necessitate immediate sale, the price could stay steady or climb higher because of favorable feelings towards the project.