- Token unlock events unlock the opportunity to gradually distribute tokens to early investors, team members, or ecosystem funds.
- Short-term volatility can be witnessed, mainly for smaller tokens, where even slight changes in supply are sufficient to shake the market.
The crypto market has noted a significant recovery this month, having Bitcoin hitting the $100,000 mark once again and Ethereum rising over 40% week-over-week. This week, around 30 projects are all set to unlock a total of $774 million worth of tokens.
The move will result in the test of the rally once again. The projects include Solana (SOL), Sui (SUI), Avalanche (AVAX), Dogecoin (DOGE), and many others. Some of them will witness daily unlocks of over $1 million.
The unlocks will not impact the token prices substantially, mainly among large-cap assets. However, short-term volatility can be witnessed, mainly for smaller tokens, where even slight changes in supply are sufficient to shake the market.
Significant Tokens Remain Unaffected
Token unlock events unlock the opportunity to gradually distribute tokens to early investors, team members, or ecosystem funds. For the most significant tokens, the next week’s token unlock indicates a small fraction of the total supply.
Also, when there is a possibility of localized volatility, the wider market disruption is not likely to happen. Smaller tokens having lower liquidity as well as thinner order books react the most to unlocks.
Projects having active communities and trading volume may witness sharp and temporary price fluctuations. The wider crypto market has gotten rid of the downtrend after a long time. Recently, BTC touched the $100,000 mark for one more time, and ETH rebounded from $1,800 to $2,500, showing a surge of 40%.
As per the CoinMarketCap Bitcoin Fear and Greed Index, it is at 74, showing a strong wave of investor confidence. However, last month, the analysts at CryptoQuant alerted that the bull market was over.
A reason for this calm in the crypto market is attributed to the pause of tariffs for 90 days by the US and its deal with China.
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Bitcoin Surges Amid US-China Trade Deal Hopes and Stock Market Sell-Off
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