Optimism (OP) has been one of the hardest hit cryptocurrencies over the past week as bearish sentiment around the coin quickly ramped up. The reason for this was a huge amount of OP tokens being unlocked this week, leading to significant buying pressure on the digital asset. However, the bearish trend does not seem to have ended yet as the altcoin could experience more buying pressure.
$600 million token unlock sends optimism into a spiral
On Tuesday saw Optimism one of the largest token unlocks as more than 300 million were put into circulation. These tokens accounted for about 9% of the total OP supply, which was a significant amount to go to market, especially during a bear market.
The coins totaling 386 million OP were worth about $600 million at the time. This meant that there was now $600 million in new potential selling pressure for the token and the altcoin started to react before the unlock was live.
In the hours leading up to the massive unlock, OP’s price first fell about 7%. But then the unlock caused further selling pressure and by the time sellers finished for the day, the digital asset had already lost more than 20% of the value it started the day with.
OP falls to five-month low | Source: OPUSD on TradingView.com
More pain for OP holders?
While it seems that OP sellers are starting to tire, the bearish business for the altcoin continues. This is because the $600 million unlock was only the first unlock for core contributors and investors, so VCs and others.
Data from Token Unlocks shows that Optimism has another token unlock at the end of June totaling 24.15 million tokens. This means that another $34.5 million worth of tokens will be unlocked in a month. This 0.562% supply may be smaller than the 9% unlock that happened in May, but it will nevertheless 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 price of OP is now down to $1.37, a price level not seen since January. This is a 50% decrease from the 2023 highs.
If the bulls fail to recover OP’s price this week, it could fall below the $1.3 support. A drop below this level would hurt holders as the next likely support for the digital asset would be $1.2, leading to a further 10% drop.