This week, the crypto market will absorb $789.65 million in unlocked tokens. Among these, Melania, Worldcoin, and Ape have some of the biggest allocations.
Historically, since unlocks lead to price volatility, there is a risk of the market turning bearish, especially for these tokens.
On Monday, February 17, Tokenomist revealed that several popular tokens will see significant token unlocks. One of the unlocks that raises concern is Melania Meme.
The project will unlock $79.63 million worth of tokens (40.83% of its circulating supply), raising concerns about sales from early holders.
Another notable example is Worldcoin (WLD), which has $45.79 million worth of tokens, or 3.64% of its supply. Ape will also unlock 15 million tokens, or 2.16% of its supply. Conversely, Jito will unlock 4.2 million tokens, or 1.43% of its circulating supply.
Can Token Unlocks Turn the Market Bearish?
Token unlocks can indeed turn the market bearish, as they often lead to increased supply and selling pressure. Recent examples include Sui (SUI) and Optimism (OP), each experiencing a 5% drop before their tokens were unlocked earlier this month.
Keyrock Research highlights that 90% of token unlocks create negative price pressure, with larger unlocks causing sharper declines and heightened volatility.
These events underscore the importance of monitoring unlock schedules to anticipate market shifts and mitigate risks. Still, not all unlocks lead to price crashes.
However, the effect largely depends on whether insiders sell their unlocked tokens and overall market sentiment. While it is impossible to know if the insiders will sell, it is possible to gauge sentiment.
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