Why does token unlocking need to be followed?
Are you unfamiliar with the term 'unlock' in the cryptocurrency market? If you are an investor planning to delve into the market, unlocking is an event that you must closely follow in order to understand its potential impact on token prices.
What is token unlocking? When issuing native tokens for each project, they are usually allocated proportionally to developers, early investors, etc. This is the token distribution model. In order to avoid the huge selling pressure of tokens at the start of the project, many projects set a 'lock-up period', which locks the tokens held by relevant parties for a certain period of time, preventing them from being traded immediately. Subsequently, at a specific time point, these tokens will be partially unlocked, allowing holders to trade freely.
This is a price protection mechanism for the project, but for investors, a large number of unlocked tokens may put pressure on the token price, such as the unlocking of approximately $DYDX at the end of last year (2023).