Avoid these Cryptocurrencies with Upcoming Token Unlocks
As a crypto enthusiast, it is crucial to be aware of certain cryptocurrencies to avoid trading due to potential token unlocks that could flood the market and lead to significant price fluctuations. Understanding the dynamics of supply and demand in the crypto market can help you make informed decisions and manage risks effectively.
Avoid trading Optimism (OP)
When it comes to trading, it is advisable to steer clear of Optimism (OP), a popular second layer for Ethereum (ETH), especially with an impending sell-off on the horizon. On May 31, the protocol is set to unlock 31.34 million OP tokens, valued at $80.23 million, representing a nearly 3% supply inflation that occurs monthly.
- Core contributors to the protocol will receive 16.54 million OP tokens, worth $42.35 million.
- Private investors will get $37.89 million to realize their monthly profits over retail buyers.
dYdX Protocol (DYDX)
Another cryptocurrency to avoid trading due to upcoming token unlocks is the dYdX Protocol (DYDX). The decentralized exchange protocol has been flagged as one to watch out for in terms of potential market flooding. DYDX will release 33.34 million tokens on June 1, valued at $70 million, resulting in nearly 12% monthly inflation.
- Previous unlocks of similar amounts have demonstrated the negative impact of supply inflation on the purchasing power of cryptocurrencies.
- It is important for investors to stay cautious and monitor the situation closely.
Sui Network (SUI)
Sui Network (SUI) is another cryptocurrency that traders should avoid due to its recurrent monthly token unlocks. This layer-1 blockchain developed by former Meta Platforms engineers will see a 2.8% increase in supply this month as it unlocks 65.08 million SUI tokens on June 1, valued at $70 million.
- Private investors will receive the majority of unlocked tokens, accounting for over 60% of the total.
- Speculating on the economic impact of these unlocks may lead to increased volatility and affect the risk-reward ratio.
Market Uncertainty and Risk Management
As you navigate the crypto market, it is essential to recognize the uncertainty and various factors that influence prices. Proper risk management strategies are crucial in avoiding potential losses and knowing when to steer clear of trading certain cryptocurrencies with upcoming token unlocks.
Hot Take: Stay Informed and Stay Safe
Ensure that you are up to date with the latest developments in the crypto market to make informed decisions. By staying informed and exercising caution, you can protect your investments and navigate the complexities of the crypto landscape successfully. Remember to prioritize risk management and avoid trading cryptocurrencies with significant upcoming token unlocks to safeguard your portfolio.
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