TRUMP Meme Coin Token Unlock Heightens Bearish Expectations?

The official TRUMP meme coin has been experiencing sell pressure over the last few days, with its weekly performance already down by over 7%.

Chances are that the meme coin may continue to experience sell pressure during the weekend.

The bearish TRUMP meme coin expectations were largely based on the fact that it was slated for a major token unlock on 18 April.

Roughly 40 million TRUMP tokens were slated to be released into the market, effectively increasing its supply.

The incoming TRUMP meme coin tokens from the unlock represent roughly 20% of its circulating supply.

Such a significant amount added to the supply is expected to impact TRUMP token price. Especially considering the low demand conditions that prevailed in recent weeks.

Bearish TRUMP Meme Coin Expectations Lead To Surge in Negative Funding Rates

It was abundantly clear that token unlock event triggered a massive spike in bearish expectations for the TRUMP meme coin.

Its open interest weighted funding rates spiked to 0.0778% which was the highest observed in history.

This surge in funding rates signaled that TRUMP meme coin was about to experience more volatility.

It was also a sign that the market was reacting to the incoming token unlocks. Spikes in negative funding rates historically indicate a surge in bearish expectations.

The recent spike may thus signal that the token unlock could lead to more bearish activity. The incoming tokens will be worth roughly $306 million.

Although most analysts maintained an overall bearish expectation for the TRUMP meme coin, its spot flows maintained a positive trend.

Roughly $1.99 million worth of inflows were observed in the last 24 hours. This also raised the possibility that whales might play the market and force a rally.

Such an outcome could potentially trigger a massive wave of liquidations.

TRUMP Meme Coin Excitement Triggers Higher Volumes

Trading activity around the official TRUMP meme coin registered a 23.19% volume surge in the last 24 hours, pushing derivatives volumes as high as $853.68 million.

Meanwhile, open interest surged 10.56% to $302.47 million. As far as price action was concerned, the meme coin exchanged hands $7.70 at press time.

This was equivalent to a 90% discount from its ATH. Also, the Official TRUMP meme coin was down by 0.33% in the last 24 hours.

Token Unlock Impact

This could indicate that the downside observed earlier this week may have factored in the token unlock and this further highlights the risk of leveraged short liquidations.

TRUMP coin had $765,020 worth of total liquidations in the last 24 hours. Majority of those were long liquidations at $623,440 while the remaining minority were short positions.

This ratio could change within the next 24 hours depend on how key participants in the market will respond to the token unlock.

Speaking of impact, the meme coin had 199.9 million tokens in circulation which means was still classified as a small cap.

The token unlock will bring that figure up to roughly 240 million tokens which means it will still be categorized as a small cap.

If the market demand and supply forces remain unchanged, then the new circulating supply could pull down the price towards the $6.5 price level. This is assuming that the marketcap remains constant.

It is also worth noting that the Official TRUMP meme coin has a maximum supply of about 1 billion tokens. This means there will be more token unlocks down the road, which could further dilute the meme coin’s long term value.