Jan 19, 2023 at 08:39Contents
On January 11 and 12, two cryptocurrencies, Moonbeam (GLMR), a smart contract platform for building cross-chain connected applications, and Aptos (APT), a repurposed blockchain initiative of Meta’s abandoned Web3 project, were unlocked — issued to the exchange for transfer and trading after the block period.
After that, the value of both tokens rose during the day: GLMR — from $0.3397 on January 11 and peaked on January 15 at $0.4315 (+27,02%); APT — from $5.1476 on January 12 and peaked at $8.6947 on January 15 (+68,91%).
It happened because the more coins there are, the more demand there needs to be for a price increase. A low supply means that the token (a share) is scarce, and if it is in high demand, its price will likely rise. On the other hand, if the demand for a cryptocurrency is low but it has a large supply, its price may drop.
It’s unexpected, but both tokens (GLMR and APT) are still in an uptrend — when prices are rising and each new high and low point is higher than the previous value — even after almost a week on January 18. Let’s examine why the price, as usual, didn’t go down.
The brand new newsletter with insights, market analysis and daily opportunities.
Let’s grow together!
Token lockup: What does it mean and what is it for?
The block period is a pre-planned span of time, usually following a token sale, when token holders of a cryptocurrency project are prohibited from selling their tokens.
The coins are often blocked for a certain number of coin holders. Usually the founders and the core team. Thus, they cannot make transactions or move/sell funds. This ensures that until the tokens are unlocked, the team works to develop the project and increase the value of the tokens. This helps the asset retain its value at the end of the lock-in period.
Also, it’s worth noting that locked-up tokens are not part of the circulating supply 
the number of cryptocurrency that are publicly available and circulating in the market and therefore are not considered in technical analysis performed by traders.
There are different services to find out how many coins are blocked at the moment and how many are on the market. One of them is TokenUnlocks. It is the dashboard that uses on-chain data to track tokens and inform users of upcoming unlock events. We used the platform to check the above tokens for growth after an unlock.
Aptos
According to the platform, the unlocking of the APT token occurred on January 12. Two days before the event, the value of the token was also rising (from $3.93 to $5.71), but the rally happened just after the unlock.
BREAKING: APTOS STATS.
The price of the APT token rising from $3.93 to $5.71 in just the last two days.
4.54 million APT will be unlocked on January 12. According to TokenUnlocks, 3.21 million APT will be distributed to the community.
— godshiba (@godshibaNFT) January 10, 2023
On January 12 at 12:00 a.m., the value of APT was $5.1476, but based on the charts on CoinMarketCap, the price of the asset began to increase after the unlocking. At first, it was not much, but close to the evening (~7 p.m.) there was a sudden jump, and by the morning of January 13, the coin was at $6.5067 (+26,4%).
On that day, $4.54M of tokens were unlocked. The maximum supply [the total number of tokens that will ever be mined] is 1B APT. About $143.6M APT (~856.4M blocked) has already been unlocked from it. During the last unlock, the project creators released 0.454% of the remaining amount, about 4.5M.
The next unlocking is scheduled for February 12.
Moonbeam
The unlocking of GLMR tokens took place on January 11. Moreover, as well as in the case of Aptos, two days before the event, there was a slight growth of the coin — from $0.3213 on January 9 up to $0.3397 (+5,73%). It is notable that at this moment GLMR was in the downtrend [when price action is moving lower over a period of time] but after unlocking it went upward.
On January 11 at 12:00 a.m., the value of the Moonbeam token was $0.3397, but based on the charts on CoinMarketCap, the price of the asset started to rise after the unlocking. On the first day, the value fell a little – to $0.3356 on January 12 (-1.22%), but in one day rose to $0.3503 (+4.38), and by January 14 grew up to $0.3667 (+4.68%).
#moonbeam $GLMR is freaking bullish. Retest on downtrend pic.twitter.com/uAlaxgdwTi
— Polkadot Maxi (@dotsamamaxi) January 14, 2023
The coin reached its peak on January 15, breaking the barrier of $0.4315, which is a difference of 27.02% compared to the minimum before unlocking.
On January 11, $46.183M of tokens were unlocked. The maximum supply is not set, but the creators have already mined just over 1B coins. There are ~550M coins in circulation, according to TokenUnlocks. During the last event, 4,618% of GLMR were unlocked, or 46M (~$15.6M).
The next unlocking is scheduled for February 10.
Why didn’t APT and GLMR drop after unlocking?
To answer this question, you need to understand why cryptocurrencies are rising in value.
The growth of digital assets is influenced by:
- The difficulty of mining a cryptocurrency. The more difficult the method of mining, the more expensive the coin.
- Potential interest in the token. When the number of subject queries in the network grows, the value of the coin also grows.
- The level of trust from global regulators and investors. On September 1, 2017, Bitcoin was worth $5K. Three days later, the exchange rate began to decline rapidly and fell to $3.7K after the National Bank of China declared ICO
Initial Coin Offering — a way to attract investment through the initial sale of a limited amount of new cryptocurrency operations illegal. - Demand. The higher the demand for a cryptocurrency, the higher its price.
We noted earlier that each of these tokens started to grow actively even before the unlock began, so there is a possibility that its collapse was prevented or purposely prevented in one of these ways. The most obvious one is creating interest in the token online.
A few days before the unlock began, posts about upcoming events had already started to appear on Twitter. They could draw attention to the token and, consequently, raise its value so that the unlocking did not have the opposite effect.
2/ According to @token_unlocks, 4.543.478,03 $APT (over $25M) will come to the market starting from Jan. 12.
Which means one and a half days away.
It hasn’t entered the big unlock phase yet, but people still fear the potential selling pressure caused by uncertainty. pic.twitter.com/boD2Id42NC
— COIN360 (@COIN360com) January 10, 2023
However, in most cases, the value of the asset falls after locking.
1inch
The unlocking of the token took place on December 30. As part of the event, more than $115M worth of coins were handed out, which is almost 15% of the total supply.
A few days before the unlock, the token began to decline in value. Thus, from December 27 to December 30, 1inch fell from $0.4058 to $0.3739 (-8,53%). At the time of writing, the value of the asset has risen to $0.4562 (+22,01%).
The next unlocking is scheduled for January 31.
ApeCoin
On January 17, 7,343,750 APEs were unlocked, accounting for 0,734 of the total supply, worth about $28M.
A few days before the unlock, the token price also started to reduce. Thus, from January 14 to January 17, ApeCoin dropped from $5.4809 to $4.8988 (-11,88%). At the time of writing, the value of the asset has fallen even more — to $4.61 (-6,26%).
The next unlocking is scheduled for February 17.
How can I make money on this?
Before unlocking, the project team prepares to avoid a dump. To do this, the developers set up cliff the period during which the purchased coins will be locked after listing on the exchange and vesting the token distribution period.
Shorting token unlock is a strategy when a trader opens a short position before the token unlocks to profit from falling prices. You can find information about token unlocks in TokenUnlocks, or other services (e.g., Unlocks Calendar).
Here is an algorithm of actions on how to use a short strategy on unlocks in your trading:
- Go to TokenUnlocks, and select any token that will soon be unlocked.
- Check if margin or futures trading is available for the token. If not, then it will not make sense to perform any further actions.
- Study the statistical data – the volume of the token unlock, the type of investors and their purchase prices, the liquidity of the trading pair, and the density of trading orders.
- Analyze how the token’s price reacted to previous unlocks.
- Choose an exchange for trading and open a short position with Stop Loss and Take Profit limits.
There are force majeure situations when tokens do not respond to unlocking. This can be a strong market maker an individual or organization that buys and sells to provide liquidity and depth while earning profits through the difference in the bid-ask spread, investors’ distrust of the project, or simply an unwillingness to sell coins.
Aptos and Moonbeam current prices
Even after almost a week, both tokens continue to be in an uptrend. At the time of writing:
- APT has fallen by 3.99% over the last 24 hours and is trading at $7.68. The difference compared to the moment before the unlocking is 49.2%.
As for projections for 2023, according to Changelly’s technical analysis, the average APT value could be $8.64. And its minimum and maximum prices can be expected at $7.82 and $8.89, respectively.
- GLMR has risen in value by 2.17% over the last 24 hours and is trading at $0.4125. Before unlocking, it was worth $0.3397, thus the difference is 21.43%.
BitcoinWisdom experts call Moonbeam one of the cryptocurrencies that will grow strongly in 2023. Thus, according to them, the GLMR price forecast for 2023 anticipated a significant increase in the year’s second half, possibly reaching $0.6149.
Now, according to trader Michiel de Ruyter, the coin has created a double bottom after a year-long downtrend, indicating a possible reversal.
$GLMR#Moonbeam‘s #GLMR seems to have created a double bottom after a one year downtrend, indicating a possible trend reversal
RSI is overbought which can give a small correctionIn the forseeable future $0.55 seems to be the channel top, acting as main resistance#Crypto #BTC pic.twitter.com/3VwyxyrsBi
— Michiel de Ruyter (@Crypto_RuyterNL) January 17, 2023
Conclusion
The decision to invest or not should not be based only on the upcoming unlock. Use this knowledge only as another tool to monitor the market, along with technical analysis and news flow.
The following cryptocurrencies will be unlocked in the near future.
9
