Have you ever held a token that looked good, had a solid community, was hyped, but suddenly its price dropped without a clear reason? It could be because there was a token unlock that you weren’t aware of. In this article, we will thoroughly discuss what token unlock means, why it can affect prices, and most importantly: how to follow it so you don’t become a victim of sudden dumps.
What is Token Unlock?
Before diving into the effects, we need to understand the basic concept first. So here it is:
When a crypto project launches, they usually have a predetermined total amount of tokens. But not all tokens are immediately released to the market. Some of those tokens are locked first.
Token unlock is the process where tokens that were previously locked are eventually released or "freed" to the market. These tokens can go to the developer team's wallet, early investors (VC), advisors, the community, or be used for rewards.
Why are tokens locked?
So that:
No large dumping from the team or early investors.
Maintain price stability at the beginning.
Encourage long-term project growth.
So, token lock is like a "handbrake" for projects to ensure a healthier ecosystem.
Effects of Token Unlock on Market Prices
Now we enter the exciting part: the impact of token unlock on price.
1. Increased Supply = Selling Pressure
When new tokens are released to the market, supply automatically increases. If demand stagnates, then the law of economics applies: prices can drop. (according to the law of Supply & Demand)
2. Psychological Effects on the Market
Sometimes, even if the unlock hasn’t happened yet, just the information that 'there will be a large unlock next week' is enough to trigger panic selling. The market can react faster than the actual event.
3. Dump & Extreme Volatility
If the unlock amount is large and not communicated well, it can create thick red candles in a short time. Unprepared traders can get stuck immediately.
4. Potential for a Pump
Hey, token unlocks are not always about price declines. Unlocking tokens can also have the potential to increase the price of a coin if the allocation of the unlocked tokens is directed toward project development. A simple example is marketing.
How to Check and Track Token Unlocks?
Don’t worry, you don’t have to be a developer to know about token unlock information. There are several ways you can use:
1. Check on Token Unlock Tracker Websites
Some reliable websites you can count on:
Tokenomist
Cryptorank
Dropstab
CoinMarketCap
and others
There you can see:
Unlock schedule (date & time)
Number of tokens to be released
Percentage of total supply
Who receives the tokens (team, investors, staking rewards, etc.)
2. Check the Whitepaper or Litepaper
Usually, projects explain the vesting schedule from the start. You can find that information in their official documents.
3. Use Notifications & Crypto Calendar
Use applications like CoinGecko, Binance app, or crypto calendars like CoinMarketCal to monitor important events including unlocks.
Follow the Twitter accounts of the project and developers.
4. Use Binance Research
Binance also often creates in-depth research reports on tokens listed on its platform. Check its tokenomics section!
Unlock Schedule to Watch Out For
Each token has a different unlock schedule. But there are general patterns you can watch out for:
Cliff Unlock: Tokens are unlocked in large amounts after a certain period (for example, 20% of team tokens released after 1 year).
Linear Unlock: Tokens are released gradually every month. More stable, but still need to be wary when the total released starts to become large.
Event-Based Unlock: Tokens are released when specific milestones are reached (product launch, DAO launch, etc.).
Usually, the most "scary" moments are:
First unlock (because usually the amount is large)
End of the first year (team can start selling their tokens)
After listing on major exchanges (since many investor tokens are already liquid)
Strategies So You Don’t Get Caught in It
To avoid becoming a victim of token unlocks, you can try some of the following strategies:
1. Avoid Entry Before Large Unlocks
If you know there’s a large unlock in the upcoming week, it’s better to wait. Observe the market reaction. If it remains stable, then enter.
2. Use Technical Analysis & Unlock Data Together
Combine technical data (support/resistance, volume, RSI) with unlock info. If the chart is overbought and there’s an unlock, the likelihood of a correction increases.
3. Take Advantage of Short-Term Volatility
If you are an active trader, unlocks can be an opportunity. Usually, there’s a quick dump that can be an entry moment for scalping or swing trading.
4. Choose Projects with Healthy Vesting
Tokens with uniform and transparent unlocks are safer in the long run. Avoid tokens that give 30% directly to the team from the first month.
5. Diversify Your Portfolio
Don't put all your eggs in one basket. If one token crashes due to an unlock, your overall portfolio is still safe.
Binance & Tokenomics Transparency
As a trusted trading partner, Binance is also committed to transparency. Every time a new token is listed, Binance always provides:
Complete info about tokenomics
Who are the large token holders
Vesting or unlock schedule if available
Research report from the Binance Research team
Plus, Binance also often provides notifications and insights in the app about important events that can impact the market.
If you are a Binance user, you can also use features such as:
Token watchlist to monitor price & volume
Price alert so you don’t miss moments
Advanced chart for deeper analysis
Binance registration if you don't have one:
- Binance registration: https://accounts.binance.com/register?ref=U20S3HEE
Code: U20S3HEE (20% Gas Fee Discount + Active Campaign)
Example of Token Unlock Data?
$PYTH Network to unlocks 58.62% of circulating supply tomorrow, totaling $289M. (Tomorrow, May 21, 2025)
$TRUMP unlock 40 million tokens worth $330 million, or 20% of the circulating supply. (April 18, 2025)
Or maybe like this, there are several tokens like $APT , #Sei , #ARB , STRK, and others.
Token Unlock = Threat or Opportunity?
The answer: it depends on how you look at it. For those who are unaware, token unlocks can be a painful trap for their portfolio. But for the observant, this can be an opportunity for cheap entry or quick profits from volatility.
What’s important is that you understand the context and comprehend the data. That way, you can manage your strategy wisely.
Token unlocks are a natural part of a crypto project’s life cycle. It’s not something to be feared, but also should not be underestimated. As long as you keep updated with information, understand how to read it, and can manage your strategy, you will still have great opportunities. Remember, being a successful investor or trader is not about luck, but about preparation. And in the crypto world, information is your strongest weapon.
So, ready to be smarter with Binance? Let’s keep monitoring token unlock information and always DYOR (Do Your Own Research) before entering the market.
