Most cryptocurrencies have an ongoing distribution for their locked tokens under vesting contracts. According to crypto analyst Vinicius Barbosa, it would be wise to avoid trading with the tokens during the week they are unlocked. The analyst says this is necessary for proper risk management. In this context, the analyst draws attention to 3 altcoin projects that will be unlocked next week.
Impact of abyss token unlock on the market
In particular, one of the most challenging aspects of cryptocurrencies is initial distribution. Each project adopts a unique model for this, called ‘tokenomics’. In particular, it has become popular over the years to reserve more than 50% of the entire offering for teams, foundations, private investors and advisors. These reserves are often locked in vesting agreements. Additionally, their releases often mean strategic sales in the days or weeks following the unlock.
We looked at TokenUnlocksApp’s cliff unlock events. From here we have identified three altcoins to stay away from trading next week. In total, the market will unlock $285.09 million worth of tokens in the next seven days.
First altcoin on the list: dYdX (DYDX)
First, dYdX (DYDX) will release approximately 45% of the total tokens into the market next week. Therefore, it is advisable for speculators to stay away from trading these tokens. The decentralized exchange protocol will release 33.34 million DYDX on February 29, worth $130 million at its price at time of writing. Private investors will receive most of this, 18.49 million tokens worth $72.10 million. This means profit realization. Additionally, the team will receive the remaining 14.85 million. This is also likely to go through a sale.
The token installed in Optimism (OP) will unlock
Next week’s second biggest token unlock event will be Optimism (OP). Therefore, it is better for investors and traders to stay away from OP trading. The layer-2 protocol for Ethereum (ETH) will issue 24.16 million OPs worth $86.73 million early on February 29. Interestingly, the distribution will be similar for the team (‘Core Participants’) and private investors. The former will receive 12.75 million OP, while the latter will receive 11.41 million tokens.
Last ranked altcoin: Echelon Prime (PRIME)
Echelon Prime (PRIME) will unlock 1.66 million PRIME worth $20.44 million on February 28, one day before the other two. 912,040 PRIME will go to Parallel Studios reserve and 750,000 to its private investors. So, the Web3 gaming studio native token is another altcoin project that should be avoided from trading next week for investment protection.
However, it is possible for these cryptocurrencies to perform well in the coming days despite the expected sales. The cryptocurrency market is highly volatile and unpredictable. Therefore, anything is possible in the short term.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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