Is token unlocking a positive or negative for cryptocurrencies?
In most cases, token unlocking triggers a temporary price drop, which is usually considered a result of selling pressure. However, this is not absolute, and the impact depends on the specific circumstances.
First, we need to look at the proportion of the unlocked amount. If the unlocked amount only accounts for 1%-2% of the circulating supply, the impact on the market may be very limited. Second, the stage of unlocking is also crucial. If 70%-80% of the total token supply has already been unlocked, the impact of the newly unlocked amount on the overall supply will be smaller. Lastly, there is the possibility of "bad news being fully priced in." If the unlocking news has already been fully speculated by the market beforehand, it may lead to a rebound after the unlocking, rather than a drop.
For example, today's unlocking of SUI has an unlocked amount that only accounts for 2.8% of the total circulation, which has basically no significant impact.