Keyrock’s research shows that token unlocking is almost always negatively impacted by price.

Keyrock study shows that 90% of weekly token unlocks result in price decreases. However, larger events can cause even more drastic drops and team unlocks up to 25%.

Prices are usually affected by token unlocks. About 90% of all unlocking events lead to price drops. data Keyrock’s analysis reveals. Analysis of 16,000 token unlocks revealed that $600 million in new tokens enter the market each week.

“Across the 16,000 unlock events we analyzed, a striking pattern emerged: unlocks of all types, sizes, and recipients are almost always negative for price. This highlights the importance of keeping track of unlock schedules and understanding their implications, especially for traders aiming to time the market effectively.”

Keyrock

According to the study, despite market conditions generally being good, it’s a surge in token supplies that is most likely responsible for these drops. The market is under heavy pressure to sell tokens during team unlocks, when the team of the project or the early investors release their tokens.

Apecoin’s (APEThis trend is shown in the Yuga Labs case. The team behind unlock began releasing 0.7% each month of the supply, which is worth $11,000,000. In seven months the APE price dropped 77%. That was more than Ethereum’s decline of 9%.ETHAnalysts note that.

“We know this as onchain data shows the team depositing into Market Maker OTC accounts. Knowing this was an upcoming vesting unlock that was going to persist for a while could have helped better inform a trade to potentially hold off on Buying Ape at that time.”

Keyrock

Keyrock points out that investor unlocks tend to be more controlled. Keyrock notes that these stakeholders use strategies such as over-the-counter or option sales, which minimizes market disruption. “VC and investor unlocks are not the primary drivers of price declines,” This report highlights that participants’ long-term protocols goals are in line with the findings.

Keyrock analysts have noted that linking ecosystem unlocks with growth initiatives could boost liquidity, drive adoption and present potential opportunities. But they stressed that unlocking teams requires careful management to avoid price falls.