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Circulating supply is extremely important for altcoins, and the release of locked tokens triggers significant fluctuations. This week, we will see major token unlocks for popular cryptocurrencies. If increased supply meets increased demand, it won’t cause major price issues, but under current conditions, the influx of hundreds of millions of dollars in new supply is likely to trigger some problems.
Pyth Network (PYTH)
PYTH token has a maximum supply of 10 billion. The circulating supply is much lower, and the current price is relatively high due to this. However, on May 20, 2.13 billion tokens exceeding the current circulating supply will be unlocked. The entry of more tokens than the circulating supply could cause significant issues for PYTH’s price in the medium term due to selling pressure.
Crypto investors, having learned from past painful experiences, are writing on social media that they will use this as an opportunity for short positions.
“The $910 million Pyth unlock happens on May 20. 141.67% of the current supply will be unlocked. After the unlock, AEVO lost 25% in value. Most PYTH holders are staked, so they can’t sell their assets. Regardless, I’m looking for short setups.”
While the 2.13 billion tokens are yet to be unlocked, the circulating supply remains at 1.5 billion.
Avalanche (AVAX)
One of the popular altcoins with high annual inflation is Avalanche (AVAX), which frequently undergoes major token unlocks. Since these are planned unlocks, AVAX investors increase their assets through trading or staking options. There are 9.54 million AVAX in circulation, and on May 22, an additional 382.77 million AVAX will enter circulation.
Space ID (ID)
On May 22, another major token unlock will occur for ID Coin. This represents a more modest amount, at least in dollar terms, compared to others. It is a relatively new altcoin, and 18.49 million ID Tokens will be released. It is a digital identity initiative competing in the same category as the Worldcoin team.
According to TokenUnlocks, most of the unlocked tokens will go to the foundation. The remaining portion will be distributed through airdrops and ecosystem funds. Although token unlocks generally trigger price drops, we have also seen many instances where the opposite occurred. Therefore, it is difficult for investors to have a definitive opinion on the price direction.
