Unlock Event Impact

An unlock event occurs when previously restricted tokens are released for public trading, typically according to a pre-defined vesting schedule. These events are often anticipated by the market and can lead to significant price fluctuations.

If the market is expecting a large influx of supply, it may preemptively sell, causing the price to drop before the actual unlock date. Conversely, if the market absorbs the supply easily, it may signal strong demand.

Analyzing the impact of these events is crucial for short-term risk management. It requires understanding the distribution of tokens and the likely behavior of the recipients, such as team members or early investors.