The Optimism native token OP is now facing a significant challenge as millions of tokens are set to be released into circulation. This poses a threat to the altcoin’s price, which has already been experiencing a downward trend following its 3rd airdrop.
Optimism Set To Unlock 24 Million Tokens
In the latest token unlock event, the Optimism network is preparing to release over 24 million tokens into circulation. According to Token Unlocks, a website that tracks on-chain tokens, these 24.16 million tokens are currently valued at approximately $30.7 million.
The token unlock event is scheduled for September 30, which is less than four days away. This will result in 3.03% of the total OP supply being released into circulation at once.
24.16 million tokens set to be unlocked | Source: Token Unlocks
This comes just one month after the network locked an equal number of tokens on August 30. Similar to the August unlock, the 24.16 million tokens will be distributed to two groups. Core Contributors will receive 12.75 million tokens worth $16.19 million, while Investors will receive 11.41 million tokens worth $14.49 million.
The Optimism unlock event is the largest among the $54 million in token unlocks expected to occur in the next seven days. Other notable unlocks include SUI unlocking 4.9% of its supply worth $16.92 million and Yield Guild Games (YGG) unlocking 6.7% of its supply worth $2.55 million.
Gauging The Impact on OP Price
To get an idea of how the OP price might react, it is helpful to examine its historical performance during similar events. In the case of the OP price, there is no need to look too far back, as the last token unlock event happened just a month ago.
On August 30, when Optimism unlocked the same number of tokens, the price responded negatively to the influx of supply. Initially, OP stayed around the $1.5 mark, but after the unlock, the token’s price dropped to $1.3 within two days.
This indicates that token unlocks, especially with the magnitude of the upcoming Optimism unlock, have a bearish impact on price. If the historical pattern holds, the OP price could potentially dip below the $1 mark. At the very least, the influx of new supply could result in a 10% decline, bringing the OP price slightly above $1.1.
Even at present, OP is already experiencing the effects of the impending bearish sentiment. Over the past week, its price has dropped more than 10%, falling below the $1.3 resistance level.
OP price threatened with new unlock | Source: OPUSDT on Tradingview.com
Featured image from iStock, chart from Tradingview.com