A token unlock is when previously locked tokens become available for trading. One of the most important events to track because it regularly causes price drops.
Why Are Tokens Locked?
When a project launches, most supply is locked for a period. This includes tokens for:
- The team — so they don’t dump immediately
- Early investors — venture capital that funded the project
- Ecosystem and development — reserved for future needs
Why Unlocks Cause Drops
When tokens unlock, recipients can sell. Team members and early investors often sell at least some to realize profits. Increased supply without increased demand = price drop.
Some unlocks are massive — worth hundreds of millions. This can crash price 10-30% in a day or two.
Where to Track Unlocks
Best sources: TokenUnlocks and CoinGecko calendar.
Disclaimer: This is not financial advice. Always do your own research.