In tokenomics, the unlocking of tokens is a nightmare for holders, but a goldmine for short sellers. Increased supply with unchanged demand equals a price drop.
🔸 Law of demand and supply
If the project unlocks 10% of the supply tomorrow to support the current price, the market needs an urgent injection of purchasing power equal to 10% of the market capitalization.
This is nearly impossible in a bear market.
👉 Result - the price is automatically adjusted downwards to balance the valuation.
🔸 Advance notice of news.
The price often falls 1-2 weeks before the unlock date.
Why? Because smart money and venture capitalists short to hedge or sell OTC before a large amount of tokens hits the market.
🔹 Check TokenUnlocks. If the project has a large unlock exceeding 3% of the supply:
Do not buy on the dip.
Consider short selling or selling to buy back at a lower price.
Do you know how much your assets will be diluted next month?
News is for reference only and not investment advice. Please read carefully before making decisions.
