Contents
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!
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
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.
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.
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.
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%).
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.
To answer this question, you need to understand why cryptocurrencies are rising in value.
The growth of digital assets is influenced by:
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.
However, in most cases, the value of the asset falls after locking.
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.
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.
Before unlocking, the project team prepares to avoid a dump. To do this, the developers set up cliff
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:
There are force majeure situations when tokens do not respond to unlocking. This can be a strong market maker
Even after almost a week, both tokens continue to be in an uptrend. At the time of writing:
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.
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.
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.
BlockFi, the cryptocurrency lending firm, has announced it is shutting down its web platform as…
Jack Dorsey, co-founder of Twitter, has projected that Bitcoin's value will escalate to at least…
Tether, a leading stablecoin issuer, has openly criticized Deutsche Bank following a report by the…
Taiwan is set to revise its Anti-Money Laundering (AML) laws, introducing stricter measures for cryptocurrency…
Binance has publicly refuted allegations suggesting DWF Labs engaged in market manipulation. Recent allegations have…
The European Union's financial regulatory body, the European Securities and Markets Authority (ESMA), is actively…