What is Token Unlock and How Token Unlock Affects Coin Price?

Token unlock is a release processcrypto tokenpreviously locked assets become freely available according to a vesting schedule, often triggering short-term price volatility such as a 5-15% drop in mid-cap assets if new supply is sold massively.

This event affects the price by increasing supply, which can depress the value if demand stagnates, but also provides a cheap buying opportunity or a pump if the token is used for ecosystem development.

By December 2025, total unlocks reached $1.8 billion including HYPE $383 million and SOL $277 million according to Tokenomist, making it a crucial month for traders who need to monitor the calendar for risk anticipation and strategies.

Understanding Token Unlock and Reasons for Token Unlock

Token unlock occurs when tokens allocated since the project launch are gradually released to recipient wallets such as the development team, early investors, or community funds.

Not all tokens are immediately released during the Token Generation Event (TGE), where the project mints its initial tokens; most are locked to prevent large-scale selling that could damage the price in the early stages.

Vesting is this lock-in mechanism, usually lasting 1-5 years, to align the long-term interests of the team and the holder.

Projects lock to maintain price stability, avoid dumps from VC investors who often allocate up to 20-30%, and encourage sustainable development such as network upgrades or staking incentives.

According to CryptoRank, proper vesting reduces the risk of sudden inflation, as in Layer-1 projects where 40-60% of the initial tokens are locked into the ecosystem. Without locking, prices can plummet by up to 50% post-listing due to profit-taking, as is often seen in meme coins without clear vesting.

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The Impact of Token Unlock on Coin Prices

The increase in supply from unlocks directly impacts the supply-demand balance; if new tokens are sold, the price tends to fall as selling pressure outweighs buying, especially in markets with low liquidity.

Analysis from Tokenomist shows that a 1% circulating supply unlock triggers an average 0.3% price drop in the week before and after the 2025 event, with a larger impact on cliff unlocks that are released all at once.

The psychological effect is also strong: News of a token unlock alone can trigger panic selling weeks in advance, even though it has often been "priced in" by the market.

However, this isn't always a negative thing; if tokens are allocated for marketing, airdrops, or staking rewards, demand can increase and the price can actually pump, as with community unlocks that increase engagement.

In the 2025 bull market, small unlocks were often quickly absorbed by Bitcoin ETF inflows, which reached $370 million weekly, according to Statista, mitigating the bearish impact.

Extreme volatility occurs during team unlocks or large investor unlocks, where deposits to the exchange trigger large red candles, but recovery is quick if on-chain activity is high, such as an increase in TVL.

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Common Types of Token Unlock Schedules

1. Cliff Unlock

Cliff unlocks are large releases after a waiting period, such as 20% of a team's tokens after 12 months, often creating significant supply shocks, such as the December 2025 HYPE. Linear unlocks are more gradual, monthly releases, such as 1/48th of the total vesting, providing better predictability and lower volatility, such as the regular APT vesting every 11th.

2. Event-based unlock

Event-based unlocks are milestone-based, such as mainnet launch or governance vote, which can be positive if accompanied by good news.

3. Unlock Post TGE.

The riskiest pattern is the first unlock post-TGE or the end of the first year, where early investors start to liquidate, often causing a 10-20% correction.

According to DefiLlama, projects with healthy vesting like Sui, which allocates 50% to the community reserve, tend to be more stable than those that give 30% directly to the team.

Read also:What is SpaceN (SN) Token?

How to Monitor Unlock Tokens Easily

Investors can use trusted tracking sites like Tokenomist, which displays accurate schedules, token amounts, supply percentages, and recipients, along with real-time on-chain data.

CryptoRank provides a complete vesting calendar with next unlock filters and notifications, while DropsTab focuses on unlock progress and visual tokenomics.

CoinMarketCap also has an unlocks section with live price integration for instant impact monitoring.

Read the project's whitepaper on the official website for initial vesting details, including percentage allocation and duration. Follow the project's official X account or use a calendar like CoinMarketCal for event reminders.

This tool is free and updated daily, helping avoid surprises like December's $52 million ENA unlock that triggered fluctuations.

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Strategy for Dealing with Token Unlock

Avoid large purchases before a significant unlock; wait for the market reaction and enter when it stabilizes to buy-the-dip, such aspost-unlock SOLwhich often rebound quickly.

Combine unlock data with technical analysis such as overbought RSI or support levels for more accurate predictions. Active traders can capitalize on volatility by scalping early dumps or swinging on recoveries if token stakes are high.

Choose projects with transparent and long vesting, such as those that allocate the majority to the ecosystem rather than the team, for lower long-term risk.

Diversify your portfolio to 10-15 assets to mitigate the impact of a single unlock, and set a stop-loss 5-10% below the event price. Monitor recipient wallets via the explorer for early detection of sell-offs.

Latest Unlock Example December 2025

HYPE led the way with a $383 million unlock in early December, potentially depressing prices if investors dumped, but ecosystem support could mitigate this. SOL released $277 million in a linear fashion, often absorbed by high demand in DeFi.

Sui unlocked $86 million on December 1st from stake subsidies, Aster $86 million for an airdrop on December 15th, as well as a regular $25 million APT, totaling $1.8 billion according to CryptoRank.

Conclusion: Is Token Unlock a Loss or an Opportunity?

Token unlocks are a natural part of the crypto project lifecycle, potentially posing a dump threat if not prepared, but also an opportunity for those with data literacy to gain low entry or profit from volatility.

In 2025 with an annual unlock of $74 billion, information from trackers will become a key weapon for safe navigation.

Always conduct independent research, understand the project context, and manage risks to leverage this event as part of a long-term investment strategy.

How to Buy Crypto on Bittime

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Start with registration and identity verification, then make a minimum deposit of IDR 10,000. After that, you can immediately buy your favorite digital assets!

Check the exchange rate BTC to IDR, ETH to IDR, SOL to IDR and other crypto assets to find out today's crypto market trends in real-time on Bittime.

Also, visit the Bittime Blog for interesting updates and educational information about the crypto world. Find reliable articles about Web3, blockchain technology, and digital asset investment tips designed to enrich your crypto knowledge.

FAQ

What is an unlock token in cryptocurrency?

Token unlock is the release of previously locked (vested) tokens into a freely circulating supply according to the project schedule.

Why does the unlock token often drop during large unlocks?

Due to a sudden increase in supply (supply shock), if buyers sell, selling pressure increases, and prices fall by 5–20%.

What is the difference between cliff unlock and linear unlock?

Cliff = a large release at once after a certain period. Linear = small, gradual releases every month, more stable.

Where can I check the latest token unlock schedule?

Use Tokenomist, CryptoRank, DropsTab, or the “Unlocks” section on CoinMarketCap – they’re all free and accurate.

Do all unlocks always make the price go down?

No. If the token is directly staked, used by the ecosystem, or the market is bullish, the impact could be minimal or even a catalyst for a pump.