Tezos is set to undergo its Ushuaia upgrade in mid-July, a highly anticipated event that could have significant implications for the cryptocurrency's price. The upgrade will unlock a portion of the token supply, which has been locked up since the project's inception.
The exact amount of tokens that will be unlocked is unclear, with two reputable calendars, RootData and DropsTab, listing different figures: 9.38 million UP by RootData and 12.85 million UP by DropsTab. The discrepancy highlights the challenges of predicting small-cap market movements, especially in situations where new supply enters the market.
Against a market cap of around $41.4 million and trading volumes that can swing near cap size, any concentrated selling during the unlock period could lead to outsized price movements. Market participants will be keeping a close eye on liquidity levels, exchange order books, and potential sell flows to CEX deposit addresses.
While some market makers may choose to hedge pre-event, others may tighten spreads in anticipation of increased volatility. Liquidity providers are likely to prefer surviving the chaos over catching a falling knife. The risk posture is expected to be cautious, with wider slippage and faster price movements possible near T0.