- DYDX will unlock tokens worth over $13.4 million on Tuesday this week.
- Historically, token unlocks tend to be negative for cryptocurrencies.
The DYDX token retreated on Monday ahead of the upcoming token unlock. The token retreated to a low of $1.957, the lowest level since July 13th of this year. It has plunged by more than 18% from its highest point in June.
Token unlocks ahead
dYdX is one of the leading companies in the blockchain industry. It runs a popular decentralized exchange that handles billions of dollars every month as it competes with the likes of Uniswap and GMX.
dYdX will be in the headlines this week as another round of token unlocks is set to take place. The network will unlock tokens worth over $13.4 million on Tuesday. These tokens are equivalent to about 3.81% of the total tokens in circulation.
According to TokenUnlocks, there are 243 million dYdX tokens unlocked, with 756 million being unlocked. This means that the number of tokens set to unlock in the next few years are significant and could lead to more dilution. Its vesting schedule has February 2027 as the time when the final coins will vest.
Read more: How to buy DYDX.
Token unlocks are seen as being bearish for cryptocurrencies since they introduce more tokens into circulation. And by so-doing, they lead to substantial dilution for existing holders.
dYdX was scheduled to unlock more tokens earlier this year, forcing the developers to postpone it due to the negative headlines.
At times, however, cryptocurrencies can rise after token unlocks. For example, Optimism’s OP token has jumped by more than 5% after the network unlocked millions of tokens on Sunday as I wrote here.
dYdX price prediction
The 4H chart shows that the DYDX token has come under pressure in the past few days. It has remained below the important resistance level at $2.25, the highest level in May and June this year. It was also the highest point on July 17th.
DYDX has moved below the 25-day and 50-day moving averages while the MACD has dropped below the neutral point. It has also formed a small head and shoulders pattern while volume has been falling.
Therefore, the outlook for the token is bearish, with the next support level to watch being at $1.771, the lowest level on July 10th. The stop-loss of this trade will be at $2.11.
