The cryptocurrency market is bracing for a potential shake-up as two prominent projects, Pyth Network (PYTH) and Optimism (OP), gear up for massive token unlocks this month. These events, scheduled just weeks apart, will inject a substantial influx of new tokens into the circulating supply, a factor often associated with increased price volatility and potential downward pressure. Traders and analysts are now meticulously examining the technical landscapes and derivatives data for both assets to identify crucial levels and formulate strategies to navigate the anticipated market turbulence.

First in line is Pyth Network (PYTH), set to unlock a staggering 2.13 billion tokens, currently valued at approximately $1.24 billion, on May 20th. This unlock will effectively double PYTH’s existing circulating supply, a significant increase that historically can lead to considerable price fluctuations as the market absorbs the new tokens. Following closely on its heels is Optimism (OP), scheduled to unlock 386 million tokens, worth around $587 million at current prices, on May 31st. Similar to PYTH, this unlock will also roughly double OP’s circulating supply, creating a potentially challenging environment for price stability in the near term.

Currently trading around $0.139, PYTH has shown a modest recovery after a prolonged downtrend from its December highs. However, the impending unlock introduces a significant layer of risk. Key technical levels to watch for PYTH include the critical support at $0.12, which has held thus far, and resistance levels at $0.215 (the 23.6% Fibonacci retracement) and $0.275 (the 38.2% Fibonacci retracement). A decisive break above $0.215 would be a crucial signal of potential bullish momentum. Technical indicators for PYTH paint a cautious picture, with the RSI showing modestly improving momentum but still below neutral, and the OBV indicating relatively weak buying pressure despite steady capital inflow as suggested by the CMF. The price remains below all major EMAs, reinforcing the prevailing bearish trend. A break below the $0.12 support could trigger further selling towards the $0.10 level.

Optimism (OP) is currently trading near $0.632, having experienced a gradual decline from its December 2024 peak. The approaching token unlock on May 31st adds to the perceived volatility. The daily RSI for OP is nearing oversold territory, suggesting strong selling pressure but also a potential for a short-term bounce if short positions become overextended. OP’s price also remains below all major EMAs, confirming the downtrend. A significant recovery would require reclaiming at least the $1.071 level (the 23.6% Fibonacci retracement). Volume indicators for OP show a concerning trend of lower lows in OBV and continued net capital outflows as indicated by the CMF. Structurally, OP is compressing within a descending channel, testing critical support between $0.545 and $0.600. A break below this zone could lead to further downside below $0.50. The first bullish signal would be reclaiming the $1.071 to $1.4 resistance band.

Analysis of derivatives data reveals contrasting approaches from traders. For PYTH, open interest has sharply declined, suggesting a de-risking strategy ahead of the unlock. For OP, after an initial decrease, open interest has seen a recent uptick, indicating increasing short positions. This divergence suggests different expectations and potential price action following the unlocks. Traders should closely monitor key support and resistance levels for both tokens as the unlock dates approach, anticipating potential volatility and price swings as the market absorbs the increased supply. Effective risk management will be crucial during this period.