Crypto Tokens- Why Do Unique Tokens Pump Prior To Unlocking? 2023

What causes some Crypto Tokens to pump before Unlocking? You will find it here.

Crypto Tokens unlocked process ?

Crypto Tokens unlock is a process in which new coins enter into the circulation.

Token unlocks are considered a bearish event as the supply increases.

Token unlock refers to the process of unlocking tokens blocked under the terms of any fund rounds. Or other fundraising programs of the project.

Crypto Tokens – How Unlock Process work?

Each project carefully plans out its tokenomics to avoid excessive pressure from sellers.

Further, through out the unlocking process and prevent the decline in the price of its token.

Additionally, most of the funding comes from early investors. Who buy tokens at the lowest price.

The projects team sets up several features for the upcoming unlock to avoid a dump.

Features –

Cliff – The period during which the purchased coins will be locked after listing on the exchange.

Vesting- The token distribution period . For example 5% of tokens will be released every month . So that vesting is equal to 18 months and so on.

Shortening – Shortening token unlock is a strategy when a trader opens a short position. Before the token unlocks to profit from falling prices.

Crypto Tokens – Causes to Pump before Unlocking ?

Most of the projects are VC-funded nowadays. Additionally, they have a vesting schedule . After token unlocks , VC’s get their tokens .

In order to maximize their gains , they pump the token price to exit at higher profits.

In some cases, token unlocks mostly goto project treasury , which has a low probability of selling.

Additionally, this also causes rise in the prices.

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Crypto Tokens that Pumped prior to Unlocking – List

1. APTOS (APT)

The 4.5 M APT unlock was scheduled for January 12th & the price pumped from $3.5 to $6 before unlocking in just 7 days.

The next APT unlock is in 17 days and APT is hitting new ATHs.

What is Aptos ?

Aptos is a layer 1 proof-of-stake blockchain that supports smart contracts & decentralized applications.

It was founded by Mohammad Sheikh and Avery Ching in 2021.

They previously worked for Facebook’s Diem project.

Core Features of APTOS

It uses Move language and it can currently do 10,000 TPS in its testnet phase.

Equally, it’s scalability and decentralization makes it a suitable choice for DeFi, NFTs and Web 3 development.

How does APTOS work?

Move language enables Aptos to tackle blockchain congestion steaming from an increased no. of dApps and NFTs.

Use case of APT Token

APT token is used for paying fees. Additionally, this token is used for governance in blockchain for upgrade or changes.

This is also used for staking in Aptos blockchain. Currently staking rewards for staking APT is 7% APR.

There is no slashing for validators in Aptos blockchain.

Pros of Aptos Blockchain

a.They have experienced founders.

b.They have integrated advanced technologies to make their blockchain fast and secure.

c. They have low transaction cost and the blockchain is easy to upgrade .

d. They are blocked by notable VCs.

Cons of Aptos Blockchain

a. They are too VC centric which is a concern as VCs will eventually dump their holdings.

b. Their vesting schedule will be too aggressive after Nov.2023 which can cause price downtrend.

c. They have not been stress tested like other blockchains.

Why APT has Pumped 450% in last 25 days ?

a. Due to the rising trading volume of the top 10 Aptos NFT collections.

b. Aptos began surging ,when Binance announced opening of Aptos liquidity pools.

c. Due to Deployment of Aptos on Pancake Swap.

d. Over $50 million shorts liquidated.

2. AXIE INFINITY (AXS)

The 4.8M AXS token unlock happened on January 23, and the price spiked by 51% in just 24 hours ahead of that unlock.

Axie Infinity is a blockchain-based trading and battling game that is partially owned & operated by its players.

It allows players to collect , breed, raise , battle and trade token -based creatures known as Axie.

Current Price – $13.33

Market Cap – $1.3 billion

Total Supply – 270 million

Token Unlock in 2023 – 41 Million AXS

Effect of Token Unlock

Big amount of token unlocks suppress the price and that’s why AXS is still down 92% from its ATH.

If market will rally more than it will have less impact else AXS can go further down.

On January 23, AXS will make its second-largest unlock when it distributes 4,893,759 tokens worth $31 million.

This sum represents 1.812% of the total supply of tokens

Why are AXIE Competitors Pumping?

They provide more incentives to their players as compared to Axie.

They have less market cap which means they have high upside potential as compared to Axie.

3. RONIN (RON)

The release of 22.19M RON tokens was scheduled for January 27th .

And the price of RON increased by 25% in the 3 days leading up to the release.

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Crypto Tokens – Is it a Good Idea to Purchase Tokens before Unlocking?

Coins do not always pump before the unlock, but it has become more common in recent times.

The big players are only interested in making money. So, if they see people are bearish , they go bullish , and vice versa.

Always keep an eye on the movements of big players so that you don’t become their exit liquidity.

Crypto Tokens – Coins that can Pump in Upcoming Weeks?

Dogecoin (DOGE)

Doge is Elon’s favorite but in the past 30 days its price action is silent as it is only up 11% in the past 30 days.

Why it can Pump?

Twitter is working on crypto payments & its possible that Doge will be their choice.

Besides, Elon hinted that for controlling bots he will add a feature of 0.1 DOGE per tweet . Further, this can make Doge go parabolic.

Ripple (XRP)

Despite the market pumped in the last 30 days XRP is only up by 16% vs. 35% pump of Bitcoin.

The primary reason of this is SEC case against Ripple which is still going .

Why it can Pump?

Recently big whales are buying huge amounts of XRP . Additionally, Xrp saw over $1 billion of inflows which shows that something is happening behind the scenes . Further, it will soon it reflect on price.

Polygon (MATIC)

Despite having numerous upgrades and partnerships MATIC is only up 18% in the past 30 days.

Why it can Pump?

Polygon recently did a hard fork which will make its blockchain faster and more secure.

Apart from that top Solana projects are migrating to Polygon which will make it more popular.

Besides, that Polygon is continuously partnering with Web 2 giants.

Chainlink (LINK)

Last year link enabled staking but still it is only up 12% in the past 30 days.

Why it can Pump?

Link is one of the most usable token and after enabling of staking Link sell pressure has come down significantly.

Link whale accumulation is at its highest level after 2017 which shows they are preparing for big price action.

Tron (TRX)

Recently due to Huobi FUD , TRX dropped a lot and it is only up 10% in the past 30 days.

Why it can Pump?

Tron has the 2nd highest TVL after Ethereum & it also has its own stablecoin.

moreover, recently St.Maarten adopted TRX as a legal tender and all these positive things will reflect in its price.

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Top 10 Best Crtypto Bounce Backs of 2023

CRYPTO	PRICE	30 DAYS
Tap (XRP)	$0.0152	8841%
Orb city	$0.1774	387%
Crates (CRTS)	$0.0086	376%
Singularity NET (AGIX)	$0.1818	279%
Aptos (APT)	$12.82	247%
Artificial Liquid Intelligence (ALI)	$0.0362	293%
Fetch AI (FET)	$0.2862	206%
SONM (SNM)	$1.5673	197%
Serum (SRM)	$0.4204	181%
LCX	$0.1026	203%

What are the Coins with higher Upside Potential ?

GALA Games (GALA)

It is a blockchain-based play-to-earn gaming platform that rewards players with digital assets for their in-game accomplishments.

Price – $0.04983

Market Cap – $345 Million

Total Supply 35,240,112 , 493

Token Unlock in 2023 – 2.23 Billion

The Sandbox (SAND)

It is a blockchain – based virtual world allowing users to create , build, buy and sell digital assets in the form of a game. It focuses on facilitating a creative “play-to-earn” model.

Price – $0.8065

Market Cap $1.2 Billion

Total Supply – 3 Billion

Token Unlock in 2023 – 706 Million

Illuvium (ILV)

It’s an open – world fantasy battle game built on the Ethereum blockchain. It aims to provide a source of entertainment to both casual gamers and hardcore DeFi fans.

Price – $59.44

Market Cap – $118 Million

Total Supply – 7.4 million

Token Unlock in 2023 – 1.5 Million

Yield Guild Games (YGG)

It’s a decentralized autonomous organization (DAO) that invests in virtual world of NFTs. It contains a play-to-earn feature. Furthermore, users receive native tokens for activity.

Price – $0.2971

Market Cap – $ 56 Million

Total Supply – 1 Trillion

Token Unlock in 2023 – 176 Million

GAMEFI (GAFI)

It is an all-encompassing hub and one-stop shop for game finance, serving game studios , players , traders and investors.

It is the first marketplace to enable cross-games trading of in-game items and NFTs.

Price – $6.80

Market Cap – $35 Million

Total Supply – 14 Million

Token unlock in 2023 – 4 million

What is Fundamental Analysis in Crypto ?

Fundamental analysis (FA) is a method used to assess the intrinsic value of asset. further , it examines qualitative and quantitative factors such as :

Project management & reputation ,

Crypto user community

Project financials

Market capitalization

real-world application & future use.

Goal of Fundamental analysis is to determine if the price of an asset is overvalued or undervalued.

In other words , FA seeks to find out the Real value of asset against the current Trading price.

Framework of Fundamental Analysis in Crypto

On-Chain Metrics

a. Transaction Value & Fees

b. Active Address

c. Hash rate and staked amount

2. Project Metrics

a. Whitepaper

b. The Team

c. Tokenomics and use case

3. Financial Metrics

a. Market Capitalisation

b. Volume

c. Liquidity

Conclusion

The price movements before, during and after major token unlocks show a repeating trend.

The majority of tokens see buying pressure ramping up toward notable scheduled unlocks.

Further it is then followed by a price correction.

In most cases, this price correction is short -lived and quickly turns into a slow and steady growth for the token. However, some tokens fail to follow this pattern.

The above-mentioned trend is most often seen in large-cap tokens.

Where token unlock creates a network effect that puts the project on the map and attracts new users.

It is also evident in projects that distribute a significant quantity of its tokens to users.

Price decrease after the unlock?

Projects that distribute a large number of their tokens to private investors and internal teams.

These are the ones that see their price decreasing the following major unlocks.

a. Some unlocks also come at an unfortunate time for a token and its holders . For instance, STEPN GMTV reward distribution came after the protocol’s heyday . Further it coincided with a broader downturn caused by FTX.

b. There is also the factor of timing .The earlier in a project’s life the unlock happens. The bigger effect it will have on its token’s price.

Large -cap , highly -liquid projects such as Polygon are often unfazed by unlocks . As their huge network quickly absorbs any price volatility.

For most tokens , unlocks bring increased liquidity and create a more stable price environment . In the months following an unlock, most tokens stabilize their price with significant gains.

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