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FollowingToken unlocking: Why does a huge release not necessarily lead to a collapse?
One crypto project may announce that hundreds of millions of dollars in tokens are about to be unlocked, but the price remains unchanged; while another project releases only a small number of tokens but immediately faces heavy selling pressure. The reason is that "unlocking" is not the same as "selling".
Token unlocking is the release of previously restricted tokens based on the project's vesting schedule, making them available to founders, employees, early investors, eco-funds or other recipients. Whether these tokens will have a negative impact on the market depends on the identity of the recipient, the proportion of the release size relative to the circulation supply, and the market's ability to absorb potential selling pressure.
Unlock size is more important than dollar headings
Trackers usually describe unlock events in terms of dollar value. For example, a project may have "$200 million unlocked", which is calculated based on the number of tokens planned to be released and their current market price. But that figure does not mean that $200 million in funds will be suddenly sold.
A more valuable indicator is the percentage of unlocked volume to circulating supply . Tokenomist tracks the proportion of tokens that are about to be unlocked relative to the existing circulating supply, as this demonstrates the potential expansion of tradable float positions. If the release amount is equivalent to 15% of the circulation supply, it may significantly change the supply and demand dynamics of small tokens; while if it is only 0.5%, it will be easier to be absorbed by the market.
That's why investors compare market value to fully diluted valuations (FDV). The huge gap between the two may mean that a large amount of supply has not yet entered the market.
Who received the tokens?
The flow of tokens is as important as their size. Tokens released to early-stage venture capital institutions or team members often raise more concerns because these holders have a very low cost base and therefore have a stronger incentive to make profits.
[TAG 78] The allocation of ecosystems is different. These tokens may be used for grants, pledge incentives, liquidity plans or treasury management, rather than immediately flowing into exchanges. This also applies to the attribution schedule itself. Tokenomist distinguishes cliff unlocks from linear releases: one-time unlocks release tokens collectively at a specific point in time, while a linear schedule releases supplies continuously (usually daily). As a result, large-scale one-time unlocks can lead to sudden changes in available supply, while progressive releases give the market more time to absorb.Liquidity determines how much sell-off the market can withstand
Imagine two tokens each unlocking $50 million. One of the tokens has billions of dollars in daily transactions and has a deep order book, while the other token has only real daily liquidity of US$10 million. Even if only some recipients choose to sell, the second token is more vulnerable.
This is called the market's absorption capacity : how much new supply the market can accommodate without causing significant price misalignments. Tokenomist evaluates this indicator based on factors such as trading volume, order book depth and existing floating positions. Weak liquidity explains why large holders can have a disproportionate impact on smaller crypto markets, and this dynamic is also related to "exit liquidity."
