- 1inch token unlock on the way.
- Three previous unlocks sliced the 1INCH price with no recovery.
- Will the early investors sell?
YEREVAN (CoinChapter.com) – On June 1, 04:00, the decentralized crypto exchange 1inch will unlock nearly 250 million same-named tokens, according to the vesting schedule. If the past is any indication, a selloff is on the way, as was the case for the previous unlocks.
As of May 29, the exchange’s token traded at just below $0.4, 95% lower than the peak price of $7.8 in May 2021.
Additionally, the exchange token traded below its 20,50,100, and 200-day exponential moving averages, hinting at a possible bearish continuation. The declining trading volumes also testified to low expectations from the holders.
Previous unlocks hurt the 1INCH price.
Data shows that the 1INCH price never recovered from the previous three unlocks.
In the subsequent two weeks after Dec 2021 unlock, the token price fell 27%. The second unlock in June 2022 pushed the 1INCH price 40% lower in the same period, while the third unlock in Dec 2022 slashed another 20% off the token’s value.
The reason behind the price decline is the following: while some investors will keep their 1INCH tokens after unlocking, many others might sell, flooding the market and causing the supply to rise against the demand.
For example, during the previous unlock, wallets associated with the infamous Alameda Research sold 1INCH tokens immediately, while Binance and Pantera Capital wallets held their share.
Will early investors sell?
According to the research by the Lookonchain platform, 1inch investors in the Seed and Series A fundraising will receive 19.5% of the total supply at approximately $0.05 per token. “$175M was raised in the Series B Round; the token sale price is $1.5,” commented Lookonchain.
According to the speculated token sale price, Seed and Series A investors will receive 8x of their initial investment, but Series B investors will lose 73% of funds.commented Lookonchain.
It is not yet clear whether investors in gain would opt for a selloff. However, Lookonchain also noted that retail investors should keep their hand on the pulse and check the token’s netflow to exchanges.