In this post:
- Trends in token unlocking show that not all tokens perform similarly in terms of price movements and unlocked value.
- According to data, token unlocks can significantly affect a crypto project’s market dynamics in both positive and negative ways.
- Additionally, market data show that there are winners and losers in every category of cryptocurrency that is among the top performers.
According to a Token Unlocks analysis that looked at major trends in a variety of crypto project categories, not every token performed similarly in terms of price performance and unlocked value. There were ups and downs in different areas. Token Unlocks claims that the differences in market price responses and unlock values offer insightful information to both individuals and projects.
DEX and DeFi sectors together had unlocked nearly $1.6 billion, according to the statistics, but their price performance was still negative at -27.5% and -15%, respectively.Notwithstanding unlocking about $1 billion in value each, derivatives and gaming tokens saw declines of 87% and 37.75%, respectively.The results were impressive: RWA led with a massive rise of almost 295%, and LIQUID Restaking had a price surge of 234%.
While the value of some tokens rises, that of others falls
📊 Token Unlock Trends: Why Some Sectors Rise and Others Sink
— Token Unlocks (@Token_Unlocks) October 2, 2024
In the world of crypto, not all tokens perform equally, especially when it comes to their unlocked value and price performance.
Our analysis uncovers key trends across various categories👇:
– DeFi and DEX sectors… pic.twitter.com/9wkeMpKB5t
According to Token Unlocks, a cryptocurrency project with a very high percentage of unlocked tokens greatly boosted the quantity in circulation, which can have an effect on the dynamics of the token’s market.In October 2024, Solana ($SOL) was issuing tokens valued at more than $360 million, while Celestia ($TIA) was releasing 91.94% of its total circulating token supply.
Investors should watch out for increasing shortterm volatility and selling pressure in these cryptocurrency projects, according to the Token Unlocks aggregator.
After examining more than 5,000 token unlock events, engineers Mustafa and Carl found that tiny unlock events (between 0% and +1%) had very little effect on price. On the other hand, there was a clear inverse relationship between pricing and unlocked values (sizes) for larger unlocks (+>1%).The token engineers noticed that compared to tokens in their early vesting stages, tokens with more than 70% of their supply vested had significantly lower volatility and higher pricing.
The token engineers asserted that protocols that distributed more unlocked tokens to private entities, such as teams and investors, than to public groups, such as the project’s community, performed marginally better.
After unlocks, a number of things impact token pricing
Token Unlocks’ historical data showed that the $PENDLE saw a notable uptick in price, rising 234%, following the unlocking of 4.2% of its total supply.According to the data, $PENDLE has a good market position and a high level of market confidence in the cryptocurrency project.
The market volatility of other tokens, such as $ENA, was demonstrated by its 66.73% decline after only 2.9% of its total supply had been unlocked.Between September 30 and October 6, 22.53% of $ENA’s supply, or $172.08 million, was supposed to be unlocked by cliff unlocks, according to Token Unlocks.However, according to Coingecko’s data, its price had decreased by 5% to $0.35 in the previous day.
Historical data from Token Unlocks also revealed that, despite only 2% of their total quantity being in circulation, tokens like Aave gained 44%.The increase in price demonstrated the strong market demand for the token, which may have countered any downward pressure.
The statistics also revealed that Aave’s price movement was impacted by investor confidence in the token’s long-term value, which kept price volatility under check. Investors were urged by Token Unlocks to take timing into account when forecasting a token’s price movement and overall market performance.
