Why do “known” token unlocks still manage to push the price down?
When I first started researching altcoins, I also believed that “public information has long been priced in.”
The unlock date, amount, and beneficiary addresses are all written in the documents. Since everyone knows, the price should have reflected it in advance.
Later, I realized that knowing someone is going to sell is one thing, and whether the market can truly absorb it is another.
I once bought a low-circulating-supply, highly valued project.
Before each unlock, the team would issue positive announcements, and the community repeatedly stressed that “the unlock has already been priced in.” At first, the price didn’t really drop much, so I thought the selling pressure had been digested.
But unlocks aren’t a one-time dump on the exact day. Instead, the team, institutions, and market makers keep receiving sellable tokens over the following months. As long as new buying demand can’t keep up, the price will slowly step down through repeated rebounds.
To judge unlock risk, you can’t just look at how much the unlock represents of the total supply. You also need to consider how large it is relative to the current circulating float, how low the recipients’ cost basis is, whether the daily average trading volume can absorb it, and whether the market has strong enough new narratives to attract incremental capital.
Many altcoins don’t suddenly become worse as a project—they’re simply dealing with constantly growing token supply, while buy-side demand is drying up.
Remember: public selling pressure isn’t the same as disappearing selling pressure. The market may be able to know about an unlock in advance, but it can’t magically create buyers ahead of time.
When I first started researching altcoins, I also believed that “public information has long been priced in.”
The unlock date, amount, and beneficiary addresses are all written in the documents. Since everyone knows, the price should have reflected it in advance.
Later, I realized that knowing someone is going to sell is one thing, and whether the market can truly absorb it is another.
I once bought a low-circulating-supply, highly valued project.
Before each unlock, the team would issue positive announcements, and the community repeatedly stressed that “the unlock has already been priced in.” At first, the price didn’t really drop much, so I thought the selling pressure had been digested.
But unlocks aren’t a one-time dump on the exact day. Instead, the team, institutions, and market makers keep receiving sellable tokens over the following months. As long as new buying demand can’t keep up, the price will slowly step down through repeated rebounds.
To judge unlock risk, you can’t just look at how much the unlock represents of the total supply. You also need to consider how large it is relative to the current circulating float, how low the recipients’ cost basis is, whether the daily average trading volume can absorb it, and whether the market has strong enough new narratives to attract incremental capital.
Many altcoins don’t suddenly become worse as a project—they’re simply dealing with constantly growing token supply, while buy-side demand is drying up.
Remember: public selling pressure isn’t the same as disappearing selling pressure. The market may be able to know about an unlock in advance, but it can’t magically create buyers ahead of time.