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The cryptocurrency market is preparing for a major event such as Optimism (OP), Aptos (APT), and Taiko (TAIKO) are preparing to open tokens with a total value of $169.66 million. According to data from TokenUnlocksApp, cryptocurrencies worth millions of dollars will flood various ecosystems this week, which could increase prevailing selling pressure. Among these cryptocurrencies, Aptos (APT) dominates token openings, with nearly $100 million worth of APT set to open in the next seven days.
Explanation of unlocking the token
Token unlocks refer to the issuance of a pre-determined number of tokens that were previously locked or awarded during the launch of the cryptocurrency. When these tokens become available, they can be traded on the market, often resulting in increased liquidity. However, a potential downside is that a sudden spike in supply can lead to price volatility as recipients of unlocked tokens may decide to sell, causing downward pressure on prices. As such, new buyers are used as exit liquidity for early investors, team members or project developers who acquire these unlocked tokens.
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according to Data from TokenUnlocksAppThis week, cryptocurrency market activity will see a large issuance of tokens across three major projects: Optimism (OP), Aptos (APT), and Taiko (TAIKO). These upcoming unlocks are particularly noteworthy because they follow a cliff unlock mechanism, where a large number of tokens are unlocked at once. Interestingly, these unlocks come just one week after SUI, another prominent project in the blockchain space, 64.19 million tokens opened Its value is estimated at approximately $106 million.
Of these three projects, Aptos stands out by having the most significant conquest. A total of 11.3 million APT tokens are scheduled to be issued, with a total value of approximately $99.75 million at the current APT price. The second most notable opening comes from Optimism, which will issue 12.47 million OP tokens worth around $21 million. Taiko, a project focused on zk-rollup technology To scale Ethereum, it will also unlock 12 million tokens with a total value of $20.28 million.
What’s next? Should you buy or sell?
Cliff token unlocks have more profound effects on cryptocurrency prices than linear unlocks. Of the three ecosystems, the Taiko open appears to be the most important, as a larger portion of the circulating supply (15.62%) will be opened in a single event, which can significantly impact the price action. In comparison, Aptos and Optimism will see smaller portions of the total circulating supply open. Aptos is set to open 2.3%. of circulating supply, while optimism will release 1% of circulating supply.
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However, monitoring the opens is crucial for investors in the rest of the week. This is especially true for retail investors, as they can bear liquidity risk when opening these tokens. They can be used as exit liquidity once holders of unsecured tokens decide to sell them or reduce their exposure.
Featured image created with Dall.E, chart from Tradingview.com