This week will be notable for the cryptocurrency market with a historic unlocking of tokens estimated at $3 billion, the largest since November 2023. Central to this event is Ondo Finance.
A Massive Unlocking That Worries the Market
The crypto market is preparing for a significant event starting on January 13, 2024. According to data from Tokenomist, several major projects, including ONDO, ARB, STRK, and SEI, will participate in this massive unlocking. Ondo Finance, specializing in asset tokenization, is set to release 1.94 billion ONDO tokens, valued at $2.23 billion. This colossal amount greatly exceeds the daily trading volume of the token, which currently fluctuates between $250 and $300 million. Facing potential selling pressure, the price of ONDO is already showing signs of weakness, trading at $1.14, its lowest level since early December.
Impact and Outlook on the Crypto Ecosystem
Token unlocks are an essential mechanism in the crypto ecosystem, enabling gradual distribution of tokens to early investors and development teams. This approach traditionally aims to prevent massive dumps and maintain some price stability. However, the exceptional scale of the unlocking scheduled for this week raises legitimate concerns. A recent study by The Tie highlights that tokens facing unlocks exceeding 100% of their average daily volume generally experience high volatility before and after the event.
Risks and Opportunities for Investors
The impact of this mega-unlocking could reverberate throughout the altcoin market, creating opportunities for savvy traders, but also increased risks for less experienced investors. The coming days will be crucial in assessing the market’s capacity to absorb this massive offer of tokens.
This week's events may have a significant impact on the crypto market. Paying attention to these unlocks will help market participants better prepare for potential changes.
