Locked Token Liquidity

Locked token liquidity refers to the portion of a token's supply that is held in smart contracts, vesting schedules, or other non-circulating states. This liquidity is essentially removed from the market, which can significantly affect the price volatility of the remaining circulating supply.

When a large percentage of tokens are locked, the market can be more sensitive to buy and sell pressure because there are fewer tokens available to absorb changes in demand. Analyzing the ratio of locked to circulating supply is important for understanding the depth of the market and the potential for future supply shocks when those tokens eventually unlock.

It provides a clearer picture of the actual market availability and helps investors assess the risk of liquidity-driven price swings.