Large unlock cliffs can be highly destabilizing — but impact depends on context.

When a meaningful percentage of circulating supply unlocks at once, the market must absorb a sudden increase in float. If depth of liquidity and buyer capacity are insufficient, price pressure is likely. Even if actual selling is modest, the anticipation of distribution can create pre-emptive downside.

Cliffs are most damaging when:

• Early investors are deeply in profit.
• Liquidity is thin relative to unlock size.
• Demand drivers are inactive or weak.
• Communication around unlock mechanics is unclear.

Conversely, if recipients are strategically aligned, liquidity is robust, and demand is strong, markets can absorb cliffs more efficiently.

The issue is not the cliff itself — it is whether incremental supply materially exceeds incremental demand at that moment.

If you want to model upcoming unlocks against depth of liquidity and projected demand, book a consultation with Forgd.