WHY SHOULD YOU CHECK TOKEN UNLOCK SCHEDULES?

[TradeCoinD2]

After each token unlock period, the total supply of a coin increases, which can lead to inflation and a decrease in price to balance with the current market capitalization.

This often results in a significant price drop when:

*Too many tokens are unlocked simultaneously, flooding the market, and demand can't absorb them all.
*The market is stagnant.
*There's no positive news to drive token price increases.
*The #DevelopmentTeam  has to sell tokens to maintain the project.
*Venture capitalists (VCs), backers, incubators decide to take profits from the project.

On the other hand, some cases can lead to price increases, even substantial ones, such as:

*A favorable market environment for pumping, with significant events supporting the token, like the upcoming World Cup for Chiliz or the trend towards the Metaverse following Facebook's rebranding to Meta.
*VCs collaborate with market makers to pump the token price. For those unaware, Alameda Research has a dedicated form on their website for contact if there's a need to pump a project's token price.
Notable examples include Solana, where VCs received Solana at $30 but decided not to sell and instead pumped it to over $200 to increase liquidity before selling.
*VCs decide to have "diamond hands" with the project. This is extremely rare and only happens with large, long-term vision funds like a16z, Paradigm, Binance Labs, leading to significant losses for some funds.

For example, Binance Labs experienced over $3 billion in losses when they decided to have "diamond hands" with the Terra (Luna) project.
*The market absorbs the entire supply of tokens being released. This occurs when whales sell, but the demand is even higher, allowing these whales to sell at the bottom.
Therefore, monitoring token unlocks is crucial. However, sometimes it may not be the most significant factor and should depend on the market conditions. Pumping the token price is vital when there's a large token unlock to increase liquidity.

If you can sell your tokens in time while market makers and VCs are pumping, it can lead to substantial profits if you time your exit correctly.

On-chain data is available for everyone. What you know, market makers also know, so sometimes it's not advocating to put too much trust in this data. Instead, look at the project's potential in the near future.