The impact of unlocks on the token price at the moment.

First, we need to understand what unlocks are. An unlock is the release of coins that were purchased by investors at an early stage long before listings on exchanges. Primary investors receive a certain number of coins for their contribution to the project, which they cannot sell until a certain moment.

There are several different options and systems by which coins are unlocked. There is the classic method where investors are simply allowed to sell a portion of the coins received for their investment. There is an option, like in Aptos and Flow, where the total number of coins remains locked for 2-3 years with no possibility of sale, but approximately once every 1-3 months, a portion of the accrued coins is unlocked for investors due to the total amount being in staking. There are many other options and systems that should be explored, and this is usually indicated in the project's tokenomics in advance and can be easily found in the public domain.

You often hear the tale 'tomorrow there will be unlocks and the price will drop' or the opposite 'tomorrow there will be unlocks and the price will rise' - that's not how it works 😀

The question should not be posed as 'how do unlocks affect the price' but rather 'how will the unlock affect the balance of supply and demand'. A simple change of phrasing will help you understand where to dig. ))

First of all, we need to understand whose coins are locked there. They could be coins solely of funds or funds plus a number of private investors. This plays a crucial role, as if the locked coins are owned by funds, they may simply not sell them if the price does not differ significantly from the price at which they acquired them. If the coins are owned by many private investors, the situation is the opposite; most of them will likely sell them to the market, increasing supply while demand remains at the same level. If the percentage of private investors is not large, then despite selling their coins to the market, large funds could immediately buy them back just to shake out weak hands, thereby keeping the balance of supply and demand unchanged, as well as the price.

Often, before unlocks, interest in the coin is fueled through the media, increasing demand, and just before the unlock, there is a pump that immediately fades after the unlock as new arrivals partially unload funds when the price becomes interesting for them.

I can provide dozens of examples, but it's important not just to read them all but to grasp the essence. To understand how the price will react, it's important to conduct analysis and understand how demand and supply will change. For this, we need to know whether the current price is favorable for funds to sell, whether there was media hype the day before, what the unlock system is, and what percentage will be released into the market, and who the owners of the locked coins are.

And as always, one must think and analyze, firstly to understand the meaning and logic behind the event, rather than just reading headlines and rushing to sell or buy.

IMPORTANT. Usually, all this leads to just local short-term swings rather than serious price changes and should not be a cause for action if there are long-term plans for the coin.

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