The cryptocurrency market is bracing for heightened selling activity in the coming month, with nearly $1 billion worth of tokens scheduled to become available for trading.
Notably, projects like Optimism (OP), Avalanche (AVAX), The Sandbox (SAND), Aptos (APT), and Sui (SUI) are anticipated to experience substantial token unlocks, contributing to increased trading volume and market dynamics.
In the initial stages of a cryptocurrency project’s launch, its tokens typically undergo a vesting period during which they remain restricted. However, as these tokens become unlocked, holders gain the ability to sell or transfer them, potentially exerting an influence on the market.
Avalanche Set for Largest Unlock
In February 2024, the crypto community is closely monitoring the largest token unlock events, starting with Avalanche’s AVAX. On February 22, a substantial 9.54 million AVAX tokens, valued at an impressive $344.17 million, are set to be unleashed, constituting 2.60% of the total circulating supply.
Another noteworthy unlock event revolves around Aptos, scheduled for February 11, where 24.84 million APT tokens, with a total value of $229.54 million, will become available. It’s worth noting that previous unlocks of the same magnitude triggered significant price corrections, with the token experiencing downturns of 17.94% and 14.10% during previous unlocks in January and December 2023, respectively.
The Sandbox, known for its biannual unlocks, has its first unlock of 2024 slated for February 14. This event will introduce a substantial 205.59 million SAND tokens, amounting to 9.19% of the circulating supply, with a market value of $95.47 million based on current market prices.
Optimism and Sui Set for Major Token Unlocks
Furthermore, Optimism and Sui are poised to make significant contributions to the circulating token supply.
At the close of February, Optimism is set to unlock 24.16 million OP tokens, amounting to a substantial $76.58 million, specifically for core contributors and investors.
On the other hand, Sui recently released 34.62 million tokens worth $54 million as part of its community access program on February 3. Remarkably, this SUI token unlock has not had a detrimental effect on its price.
Based on data from CoinMarketCap, the cryptocurrency is presently trading at approximately $1.52, demonstrating a 2.84% increase over the past day and a notable gain of more than 8% over the past week.
Similarly, dYdX (DYDX) unlocked a significant number of tokens, releasing 33 million coins with an estimated value of around $90 million on February 1. Interestingly, this token also managed to maintain stability without undergoing significant price swings following the unlock event.
It’s essential to recognize that not all token unlocks necessarily lead to price declines in the crypto market. Price movements are influenced by a multitude of factors, and the market’s response to these unlocks can vary widely.
Nonetheless, the unlocking of substantial quantities of tokens can introduce heightened volatility and create new trading opportunities within the crypto market, making it a crucial area for traders and investors to monitor closely.
