Five token unlocks to look out for next week
The Manta Network will release 6.67 million MANTA tokens to the market on Sunday in a cliff unlock event. These tokens, worth $19.80 million at current rates, will comprise 3.14% of the network’s circulating supply.
Fast forward to two days later, on Tuesday, February 20, the dYdX ecosystem will unlock 575,340 DYDX tokens to the market, comprising 0.72% of the circulating supply and worth $1.83 million at current rates. This will also be a cliff unlock.
The Avalanche network will unlock 10.24 million AVAX tokens to the market on Thursday, February 22, in a cliff token unlock event. That many tokens are worth $394.55 million at current rates and constitute 2.79% of the project’s circulating supply.
There will be another cliff token unlock event on the same day, where the Space ID ecosystem will free 18.49 million ID tokens to the market worth $10.88 million at current rates, comprising 4.29% of the project’s circulating supply.
On Friday, the ImmutableX network will see 8.55 million IMX tokens flood markets in a linear unlock event, comprising 0.63% of the gaming project’s circulating supply. This number of tokens is currently worth $26.84 million.
Possible scenarios around token unlock events
The idea of more tokens coming into the market is typically bearish as it increases the circulating supply.
With the current bullish outlook in the market, crypto holders scrutinize all metrics to establish how to make a profit from different projects. Token unlocks could provide an opportunity for perpetual traders to long or short the tokens.
The unlocks could spark rallies in the price of the assets, because in certain instances token demand increases, causing buyers to gobble up the tokens during token unlock periods. In this case, an expected token unlock could bolster confidence among the market players, as it leads to liquidity increase and, therefore, works as a demonstration of project longevity.
For a bear market situation, however, token unlocks tend to reduce token value. Ahead of the unlocks, investors start shorting the asset due to a combination of growing supply and plummeting demand. This leads to a price slump.
It is also possible that a token’s price is not affected during token unlocks particularly when the number of tokens set for unlocking is not enough to disturb the circulating supply of the project. Another possible reason for such an outcome is that the event was already priced in.
_ FXStreet
