The crypto market is facing a wave of $500 million token unlocks within the coming 10 days.
Increased supply due to these unlocks might cause price drops for the affected cryptocurrencies.
Previous unlocks for DyDx and Avalanche didn't cause significant price drops, and even led to rebounds.
SpaceID's previous unlock resulted in a price drop
Prices of cryptos across the market depend on the dynamics between demand and supply.
It so happens that token unlocks—or events where certain amounts of a cryptocurrency are released into the market—upset these dynamics.
When the supply of a cryptocurrency goes up without corresponding demand, prices suffer.
Over the next 10 days, the crypto market is gearing up for a massive wave of around $500 million worth of tokens, set to be released into the market.
Let’s go over which cryptocurrencies are set to be affected, and what this might mean for their prices.
Unlock Date: 1 June
Tokens Unlocked: 9.54 million AVAX
Current Circulating Supply: 382.77 million AVAX
dYdX is set to release a staggering $65 million worth of tokens in a little more than a week.
Keep in mind that the previous unlocking event happened on 14 May, only a few days before press time.
This token unlock released $2.12 million dYdX worth around $4.2 million and interestingly, it failed to cause a break below $1.87 for the cryptocurrency as shown below:
DyDx’s price action
Keep in mind that DyDx was already in a decline from this price level before the unlocking, and the event itself only served as a rebound point.
We are seeing a retest of this $1.87 price level again, and investors might have to keep an eye out for what happens around here, between now and 1 June.
Unlock Date: 22 May
Tokens Unlocked: 9.54 million AVAX
Current Circulating Supply: 382.77 million AVAX
Avalanche’s token unlock is expected in less than a week from now, and is set to release over 9 million AVAX tokens (worth a staggering $345 million) to strategic partners, the Avalanche Foundation, the team, and airdrop recipients.
The previous token unlock happened on 22 February and unlocked the same amount of 9.54 million AVAX (worth $359 million at the time).
Avalanche also rebounded
In an interesting turn of events, Avalanche also rebounded off a vital support on 22 February when the previous unlock happened.
The cryptocurrency formed a new higher low of around $33.5 and and hit a new high of $65.39 in a 95% rally spanning one month.
Unlock Date: May 22
Tokens Unlocked: 18.49 million ID
Current Circulating Supply: 430.5 million ID
Space ID's unlock is set to happen on the same day as AVAX's, and is going to distribute 18 million ID tokens to the Space ID Foundation, the ecosystem fund, and airdrop participants.
The last ID unlock happened on 22 April, unlocking 18.49 $ID worth $!5 million only a month ago.
ID’s price history
However, unlike the other two, ID Declined by around 25% from $0.889 to $0.66 within a week.
While token unlocks are mostly regarded as bearish events, they can also be highly bullish ones as we have seen with DyDx and Avalanche.
Moreover, they also support the longer-term price prospects of said cryptocurrency and are generally bullish in the long run.
Overall, while it is important to approach these cryptocurrencies with caution between now and June.
Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.