A token can explode 500% overnight and everyone sees a perfect chart: rising volume, bullish posts, and FOMO everywhere. That momentum is real, but price alone hides a critical number — how much of the token’s total supply is actually circulating right now.
A tiny float can fuel rapid gains, while large locked allocations can change the game once they start unlocking.
Circulating supply often differs dramatically from total supply. A project might report 1 billion tokens but have only 100–200 million available for trading.
The rest sits with teams, investors, advisors, or in treasuries and may be subject to vesting or lockup schedules.
Those locked tokens don’t vanish they’re just future supply waiting for a release schedule.
Fully Diluted Valuation (FDV) helps translate that difference into real scale. FDV estimates the market cap if the entire supply were priced at today’s market value.
That can turn a seemingly modest $200 million circulating cap into a $2 billion FDV a very different risk profile.
FDV isn’t perfect, but ignoring it makes a token look cheaper than it could become once unlocked tokens exist.
Unlock schedules and ownership concentration matter. Large, predictable monthly unlocks usually have less shock value than big cliff releases after a long lockup.
Who holds the locked tokens matters too a concentrated allocation to a few wallets raises the chance of heavy selling if those holders decide to take profits after a rally.
Conversely, broad distribution or long vesting can reduce immediate downward pressure.
An unlock event doesn’t guarantee a dump unlocked tokens simply become transferable.
Some recipients will hold or use tokens for staking, ecosystem programs, or partnerships.
The real question for traders is whether market demand can absorb the additional supply.
If demand outpaces new supply, price can stay strong; if not, even a previously unstoppable pump can reverse quickly.
