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Optimism (OP) has been one of the most affected cryptocurrencies over the past week as the bearish sentiment around the coin has risen sharply. The reason for this was the massive amount of OP tokens that were unlocked this week, causing significant buying pressure on the digital asset. However, the bearish trend is not over yet considering that altcoins are likely to see more buying pressure.
$600 Million Token Unlock Sends Optimism Spiraling
Tuesday saw optimism Its Largest Token Is Unlocked As It Is Issued Over 300 Million In Circulation, These coins accounted for about 9% of the total OP supply, which was a significant amount to move in the market, especially during a bear market.
A total of 386 million OP coins were worth about $600 million at the time. This meant that there was now $600 million of new potential selling pressure for the token and altcoins began to respond before Unlock went live.
In the first few hours after the massive unlock, the price of OP dropped by about 7%. But then the unlock added to the selling pressure and by the time sellers were done for the day, the digital asset had lost over 20% of its value on the day.
OP falls to five-month low | Source: OPUSD on TradingView.com
More pain for OP holders?
While it looks like the OP sellers are starting to tire, the bearish case for the altcoin continues. This is because the $600 million unlocked was the first unlocked only for core contributors and investors, meaning VCs and others.
Data from Token Unlock shows that there is another Token Unlock of Optimism coming at the end of June for a total of 24.15 million tokens. This means that a month from now, $34.5 million worth of tokens will be unlocked. This 0.562% supply may be less than the 9% unlocked in May, but it will still put selling pressure on the token.
$34.5 million in OP set to be unlocked on June 30 | Source: Token Unlocks
At the time of writing, the coin is down 10% on the daily chart and 33% on the monthly chart. The OP price has now dropped to $1.37, a price level not seen since January. This is a 50% decline from the 2023 high.
If the bulls fail to recover the price of OP this week, it could decline below the $1.3 support. A drop below this level would be damaging for holders as the next potential support for the digital asset would sit at $1.2, which would lead to a further decline of 10%.
