Are you still shorting tokens whenever they unlock? 👀
According to @TraderNoah's token unlock schedule, we can see that the peak unlocking period is set for 2026-2027, with approximately $400 million worth of tokens unlocking monthly, followed by a gradual decline.
Tokens to be unlocked: $DRIFT $ENA $ETHFI $HYPE $JTO $JUP $KMNO $L3 $MORPHO $PYTH $TENSOR $W $ZRO
@TraderNoah believes that unless more than $500 million in liquidity is mobilized, it may be difficult to influence market prices. If the market lacks liquidity or uses methods like over-the-counter trading, the impact of token unlocks on prices will be hard to predict 🧐
We all know that when tokens are about to undergo significant unlocks, the general expectation is a price drop (especially for overvalued tokens). However, if the token's actual performance (fundamentals) is solid, the downward pressure on prices caused by the unlock may be mitigated 🙌
Market liquidity and token fundamentals are key—pay close attention when investing!
@TraderNoah's perspective on the future
👉 The future price of tokens will be evaluated similarly to stock valuations, and may fluctuate up and down.
👉 Aggressively buying tokens won't necessarily determine the price unless you can put up more than $500 million in cash.
👉 Unlocking tokens won't necessarily impact the price; sufficient liquidity and OTC trading are required.
👉 Unlocking tokens may cause high-valued tokens to drop, but if performance exceeds expectations, it could ease selling pressure.
👉 Unlocking tokens has a significant impact on individual tokens and also affects tokens within the same sector. Tokens that drop by 50% may actually become more attractive to investors.
For detailed information, check the tweet below 👇
Some thoughts on the future:
1. token fundamental multiples will converge to equity +/- some arbitrary threshold
2. the most aggressive purchasers of tokens are least likely to be the ones determining price unless they're moving $500mm+ liquid aum
3. unlocks are hard to price in to markets without liquid perps and otc trading
4. unlocks are a headwind to overpriced token, but can be overcome by fundamental outperformance of expectations
5. unlocks are most negative for the individual token, but also negative for substitute token prices. The token that gets sold off 50% from an unlock is now marginally more attractive for investors, and they will deploy their marginal dollars into it as a consequence
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