The unlocking of $566 million worth of tokens this week could cause market volatility

The cryptocurrency market is facing a highly volatile week as more than $566 million worth of tokens are set to be unlocked and put into circulation. A sharp increase in token supply without a corresponding rise in demand often results in short-term price drops, which is why traders pay special attention to weeks with major unlock events.

Currently, many tokens have weakened significantly: HYPE is down 16.7%, XPL is down 22.1%, and JUP is down 6.5% just this week.

The emergence of new supply during a weak market phase can make price fluctuations even more intense. The large amount of tokens being unlocked this week could easily shake the market if buying pressure continues to weaken.

The HYPE, XPL, and JUP unlocks account for most of the new supply

According to the latest news, Hyperliquid, Plasma, and Jupiter are the three projects with the largest token unlocks this week. Although each project has its own reason for unlocking, they share the common factor of a sudden spike in token supply on the market.

MToken unlock | Source: XHyperliquid will unlock 9.92 million HYPE on November 29, equivalent to about $327 million, allocated to contributors. Although some large investors have been continuously accumulating HYPE, its price still dropped sharply by 16.7% over the past week.

When a token is already in a downtrend and a large new supply appears, selling pressure usually increases. If demand doesn’t keep up, HYPE’s recovery potential this week will be limited.

Plasma is expected to unlock 88.89 million XPL on November 25, worth about $17.53 million, accounting for 4.74% of the total circulating supply. XPL has dropped 22.1% over the past week. Although the new supply is intended to develop the ecosystem—a positive long-term signal—in the short term, the increase in tokens could make price action even more negative.

Jupiter will unlock 53.47 million JUP on November 28, worth about $12.83 million. Most of these tokens will be allocated to the development team and early investors. JUP has dropped 6.5% this week, in line with the stagnation trend of many Solana ecosystem-related tokens.

The team receiving new tokens may prompt some early investors to take profits, adding to short-term selling pressure.

Why is this week special for the crypto market?

This is one of the weeks with the densest token unlock schedule of the month. Data from DeFiLlama and Tokenomist show that a number of projects are unlocking tokens almost simultaneously, resulting in a strong surge of new supply in a short period of time.

When many unlock events occur at once, traders often pause activity to observe the market’s reaction. Individual investors also become more cautious, reducing liquidity and trading volume.

Low liquidity makes cryptocurrency prices prone to sharp swings when selling pressure arises. This is why weeks with multiple unlock events often see unexpected intraday price movements.

Timing is also critical: the crypto market is in a weak phase, with many tokens declining for several days in a row. When weak prices are met with a large new supply, growth potential narrows unless strong demand emerges.

What should traders pay attention to this week?

The coming days will test the crypto market’s ability to absorb new supply. Token unlocks don’t always lead to downward price pressure, but they do increase risk when demand is low.

This week’s unlock events are all large-scale, while buying power has yet to show signs of recovery. Therefore, HYPE, XPL, and JUP may continue to face selling pressure if demand does not improve. In addition, Sui and EigenLayer are also at risk of being affected.

If new buying power appears, the market could stabilize faster than expected. However, until that happens, the combination of token unlocks and weak prices will continue to test the market’s strength.

The final outcome will depend on how traders react when the new tokens are released into the market.

Ong Giao