Token unlocks are a recurring event in the crypto space, often met with caution by investors who anticipate significant downward pressure on prices. The common belief is that large-scale token releases lead to increased selling, especially when early investors or team members gain access to their holdings. However, real-world data shows the impact isn't always bearish — and outcomes depend heavily on distribution structure, market sentiment, and liquidity.
A recent analysis by crypto researcher ConorRyder examined the price behavior of major tokens like AXS, SAND, IMX, and DYDX around their unlock events. The findings challenge conventional wisdom and highlight how not all unlocks are created equal.
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Why Token Unlocks Matter
In blockchain projects, tokens are typically distributed over time to teams, investors, advisors, and ecosystem participants. This gradual release — known as a token unlock — prevents immediate market flooding. But when a large portion of supply becomes liquid, it can influence trading dynamics.
Key factors that determine the market impact:
- Percentage of total supply unlocked
- Recipient group (investors vs. ecosystem/staking rewards)
- Market expectations and sentiment
- Exchange liquidity and order book depth
Understanding these variables helps investors anticipate whether an unlock will be neutral, bullish, or bearish.
AXS: A Bullish Unlock Case
Axie Infinity’s $AXS token presents a compelling example of how unlock design can lead to positive price action.
In a previous unlock, 8% of the total supply was released — with about 25% allocated to early investors. This led to noticeable sell pressure on the day of the event. Historical data shows a short-term dip as those holders took profits.
However, the most recent unlock — releasing only 1.8% of total supply — was structured differently. Crucially, none of the unlocked tokens went to early investors. Instead, they were distributed to stakeholders such as stakers and community contributors.
Result? On the unlock date and the days that followed, buy volume significantly exceeded sell volume. The market interpreted this as a low-risk event, and confidence in sustained demand remained strong.
This contrast highlights a key insight: not all unlocks are bearish, especially when investor allocations are minimal and distribution favors long-term holders.
SAND: High Investor Allocation = Higher Risk
The Sandbox’s $SAND token tells a different story.
In August, an unlock of 12% of total supply occurred — with half going directly to investors. The aftermath was predictable: several days of sustained selling pressure followed, as recipients offloaded portions of their newly liquid holdings.
Now, history may repeat itself. Another 12% unlock is expected on February 14, again with 50% allocated to investors. Given the recent price rebound in $SAND, this could trigger renewed volatility.
With investor-heavy unlocks, markets often price in downside risk ahead of time — but actual panic tends to emerge after the unlock if selling persists. Traders should monitor exchange inflows and wallet movements closely in the days leading up to the event.
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IMX: Another Warning Sign for Investor-Led Unlocks
Immutable X ($IMX) adds further evidence to the pattern.
Last November, 18% of total supply was unlocked, with exactly 50% directed to investors. What followed was a textbook case of post-unlock selloff: sell orders overwhelmed buy interest for multiple days, leading to a sharp correction.
This reinforces a critical rule of thumb:
When over 40–50% of an unlock goes to investors, expect elevated selling pressure — regardless of project fundamentals.
Such events test market resilience and often separate speculative momentum from sustainable value.
DYDX: Delayed Unlock Sparks Speculation
dYdX ($DYDX) took a strategic approach by postponing its unlock to December. The release will include 15% of total supply, with — once again — half allocated to investors.
Despite the bearish implications, the announcement triggered a 20% price surge and a 50% increase in open interest, signaling strong speculative interest.
Why the bullish reaction?
One theory is that traders believe the delay gives the team time to prepare mitigating measures — possibly including v4 protocol upgrades aimed at boosting utility and demand ahead of the unlock.
Additionally, analysis of CEX liquidity reveals that $DYDX has **shallower order books compared to $AXS or $SAND**. This means fewer trades are needed to move the price significantly — increasing volatility risk during high-supply events.
The combination of low liquidity and high investor allocation suggests that while the market is optimistic now, the actual unlock could bring extreme price swings.
Key Takeaways: What Determines Unlock Impact?
After analyzing AXS, SAND, IMX, and DYDX, we can identify clear patterns:
| Factor | Bullish Signal | Bearish Signal |
|---|---|---|
| Investor Allocation | Low (under 20%) | High (over 40%) |
| Recipient Type | Ecosystem/staking | Early investors |
| Liquidity Depth | High (deep order books) | Low (thin markets) |
| Market Expectation | Priced in | Surprise or lack of prep |
From this, three core principles emerge:
- Investor-heavy unlocks = higher sell risk
- Ecosystem-focused unlocks = potential buy-side strength
- Low liquidity amplifies volatility regardless of fundamentals
Frequently Asked Questions (FAQ)
Q: Do all token unlocks cause prices to drop?
A: No. While many assume unlocks are automatically bearish, the outcome depends on who receives the tokens. If most go to long-term stakeholders rather than investors, buying pressure can outweigh selling.
Q: How far in advance should I watch for upcoming unlocks?
A: Start monitoring 2–4 weeks before. Look for exchange inflows, wallet activity, and changes in open interest — these often signal investor intentions.
Q: Can a delayed unlock be bullish?
A: Yes. Delays can allow teams to improve product offerings or boost demand mechanisms (like staking or burning), which may offset future sell pressure.
Q: Where can I track upcoming token unlocks?
A: Several on-chain analytics platforms offer unlock calendars. Monitoring these regularly helps anticipate market-moving events.
Q: Is it safe to buy a token right after an unlock?
A: It depends. If investor allocation was low and price holds steady post-unlock, it may signal strength. But high investor unlocks often see continued selling over days or weeks.
Q: How does liquidity affect unlock impact?
A: Low liquidity means even moderate sell orders can crash prices. High liquidity absorbs shocks better — making tokens like $AXS less volatile during unlocks than thinner markets like $DYDX.
Final Thoughts: Look Beyond the Unlock Date
Token unlocks are not inherently good or bad — they’re events whose impact must be analyzed through context.
Projects like AXS demonstrate that thoughtful tokenomics can turn potential risks into confidence-building moments. Meanwhile, tokens like SAND, IMX, and DYDX serve as warnings: when large chunks go to investors with limited lockups, selling pressure is likely.
For savvy investors, the real opportunity lies in understanding who gets the tokens, how much goes to each group, and what the project is doing to balance supply with demand.
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By focusing on these deeper metrics — not just headlines — you position yourself ahead of both fear-driven selloffs and missed bullish signals. In the evolving world of crypto asset management, knowledge remains the ultimate edge.