The decentralized finance (DeFi) market is set for the launch of token unlocks this week, with over $349 million in assets expected to hit the crypto market. Some of the significant tokens with large unlock percentages include JTO (1.24%), BLUR (0.76%), GMT (0.71%), EIGEN (0.69%), and SAFE (0.57%).
These large unlocks have sparked interest in how they might change the course of prices, especially if investors choose to sell some of the newly unlocked assets. The unlock percentage of tokens like ADA and SOL differ, with ADA having a greater percentage unlocked compared to SOL suggesting more liquidity for ADA.
However, both tokens are being closely watched as their unlock supply levels could significantly impact their performance in trading platforms. Token unlocks are scheduled events aimed at gradually releasing tokens to avoid flooding the market. These unlocks usually pertain to allocations set aside for project teams, early investors, or future incentives, offering a systematic way to increase the circulating supply.
Once tokens are unlocked, they can be traded, which can affect market price. An abrupt rise in the supply of tokens may exert downward pressure on prices, especially if investors opt to sell their newly bought tokens. On the other hand, these unlocks can also increase liquidity, leading to larger trading volumes and possibly drawing in more market participants.
For investors, understanding unlock schedules is key to managing risk effectively. When tokens are unlocked, they can offer buying opportunities, particularly if prices decrease. However, they can also serve as a warning sign if sell-offs result in value drops. By examining unlock trends and distribution patterns, similar to those observed with tokens like Cardano and Solana, investors can make more informed decisions in a volatile market and adjust their trading strategies accordingly.
