A Token Unlocks analysis covering key trends across different crypto project categories disclosed that not all tokens performed equally in terms of unlocked value and price performance. Some sectors rose, and others dipped. According to Token Unlocks, the disparities between unlock values and price reactions in the market provide valuable insights for projects and individuals.
The data revealed that DEX and DeFi sectors had jointly unlocked over $1.6B, but their price performance remained negative at -27.5% and -15%, respectively. Derivatives and Gaming tokens declined by 87% and 37.75%, respectively, despite unlocking close to $1B each. LIQUID Restaking had an impressive outcome as its price surged 234%, and RWA led with a huge gain of about 295%.
Some tokens soar in value, and others sink after unlocking
đź“Š Token Unlock Trends: Why Some Sectors Rise and Others Sink
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
— Token Unlocks (@Token_Unlocks) October 2, 2024
Token Unlocks revealed that a crypto project with an extremely high percentage of unlocked tokens significantly increased the circulating supply, potentially impacting the token’s market dynamics. Solana, $SOL, was unlocking tokens worth over $360 million, and Celestia $TIA was releasing 91.94% of its total circulating token supply in October 2024.
The Token Unlocks aggregator recommended that investors should be on the lookout for increased short-term volatility and selling pressure in such crypto projects.
Engineers Mustafa and Carl analyzed over 5,000 token unlock events and identified that small unlock events (+0% to +1%) had negligible impact on price. Larger unlocks (+>1%), on the other hand, had a noticeable inverse relationship, with prices falling as unlocked values (sizes) increased. The token engineers observed that tokens with more than 70% of their supply vested had substantially lower volatility and higher prices than tokens in their early vesting stages.
Protocols that allocated higher unlocked tokens to private groups like investors and teams than public groups like the project’s community performed slightly better, claimed the token engineers.
Token prices are influenced by multiple factors after unlocks
Historical data from Token Unlocks revealed that the $PENDLE experienced a significant positive price movement when its price surged 234% after unlocking 4.2% of its total supply. The data implied $PENDLE’s strong market position, backed by huge market confidence in the crypto project.
Other tokens like $ENA dipped 66.73% after only 2.9% of its total supply had been unlocked, indicating the token’s market volatility. According to Token Unlocks, $ENA was scheduled to unlock 22.53% of its supply worth $172.08 million in cliff unlocks between Sep 30th and Oct 6th. However, its price had dropped 5% to $0.35 in the past 24 hours, as per Coingecko’s data.
Token Unlocks’ historical data further showed that tokens like Aave gained 44%, with only 2% of their total supply in circulation. The price gain indicated the token’s high market demand, which might have offset downward pressure. The data also reflected that Aave’s price movement was impacted by investor confidence in the token’s long-term value, which kept price volatility under control.
Token Unlocks advised investors to consider timing as an influential factor in predicting a token’s price movement and overall market performance.