PANews reported on December 6 that according to CryptoSlate, a recent report from Keyrock highlighted that 90% of token unlocking will have a negative impact on prices, although this effect often takes up to 30 days to fully manifest. About $600 million of previously locked tokens are circulated regularly. According to a predetermined schedule, these unlocked tokens will flow to the team, investors, and ecosystem funds. The report pointed out that tracking these schedules is crucial for traders who aim to effectively grasp market timing. Even before the tokens are released, pre-sale and hedging strategies adopted by investors who have not received full returns have already put downward pressure on prices, and prices usually stabilize within two weeks after the unlocking event.
While it would seem intuitive that larger unlocks would have proportionally more significant effects, Keyrock’s data suggests a more complex picture. Events that release more than 5% of total supply tend to cause immediate price movements. However, the impact is usually gradual and long-lasting, as investors can only partially sell or slowly hedge these large amounts of tokens. Frequent, small-scale unlocks continue to exert downward pressure, although their cumulative impact is less dramatic. Interestingly, for most unlock sizes, prices have already begun to fall as much as 30 days before the event, driven by retail expectations and complex hedging strategies adopted by institutional investors.
The recipient categories have a significant impact on price outcomes, with team unlocks seen as the most disruptive category. The report notes that teams often lack a coordinated sell-off strategy, leading to significant price drops when individual members sell tokens. Ecosystem unlocks, on the other hand, have a positive impact. These token allocations are often used to provide liquidity, user incentives, and infrastructure funding, which promotes long-term growth of the network and stabilizes prices. Investor unlocks are seen as controlled and predictable. Early investors minimize market disruptions by utilizing complex strategies such as over-the-counter trading and selling options hedges.
