Prerequisites
You can trace the "Borrow" records of the target address on lending protocols (such as Aave) via Etherscan or DeBank.
You have confirmed the address holds outstanding loan positions, and its token unlock date is approaching.
Whether sell pressure becomes higher when unlocked addresses repay loans first depends on the source of the funds used for repayment: whether they use their own unlocked tokens, or newly borrowed stablecoins.
There are two paths to repay loans after unstaking locked tokens: selling unlocked tokens directly for stablecoins to pay back debt, which generates direct sell pressure; or using the unlocked tokens as new collateral to borrow stablecoins for old debt repayment, which only counts as debt transfer. Different paths lead to completely different sell pressure outcomes.
Step 1: Determine Repayment Fund Source — "Sell Tokens to Repay Debt" or "Borrow New to Repay Old"
[What to do]: Track post-unlock fund flows of the target address, confirm whether repayment is funded by proceeds from token sales, or newly borrowed stablecoins.
[How to do]: Check the address's subsequent operation records on the block explorer after the unlock transaction is executed.
Scenario A: After unlock, tokens are transferred to centralized exchanges (such as Binance, Kraken), followed by a reduction of the loan position → Identified as "sell tokens to repay debt", this is a direct sell pressure path. During the ETH unstaking wave, some large holders swapped stETH directly for ETH, then deposited the funds to exchanges for sale to repay loans or take profits. Action guidance: The sell pressure here is real, and the token price may face short-term downside pressure.
Scenario B: After unlock, tokens are deposited into lending protocols as collateral, while stablecoins are borrowed to repay old debt → Identified as "debt transfer" or "circular strategy adjustment". When lending rates surge, original circular arbitrage strategies get liquidated as interest costs exceed staking yields, but some large holders may re-collateralize their unlocked tokens to borrow lower-cost funds to replace old debt. Action guidance: No new sell pressure is generated, but the long leverage structure may remain in place.
[Completion Criterion]: You have clearly confirmed the source of the address's repayment funds, either "sell off assets" or "borrow new to repay old".
Step 2: Check the Ratio of Repayment Amount to Unlock Volume — "Full Repayment" or "Partial Deleveraging"
[What to do]: Calculate the ratio of repayment amount to total unlocked value, to judge the aggressiveness of deleveraging.
[How to do]: Locate the address's total borrow amount on the lending protocol and the number of newly unlocked tokens, then calculate the ratio between the two values.
Scenario A: Repayment amount ≈ market value of unlocked tokens (or very close) → Identified as "full liquidation for debt repayment". A large amount of tokens will be sold, bringing significant sell pressure to the market. Ethereum staking redemption cases show that ETH lending rates on Aave surged from 2.5% to 10.6%, far exceeding the 3% staking yield, leading to mass liquidations of circular leverage strategies.
Scenario B: Repayment amount < 30% of the unlocked token market value → Identified as "partial deleveraging". Most of the unlocked tokens may be re-staked or held, and do not represent active sell pressure. Action guidance: Sell pressure at this stage is minimal, and the operation is mostly just strategy adjustment.
[Completion Criterion]: You have calculated the ratio of repayment amount to unlocked market value, and judged the deleveraging degree.
High Risk Warning
Surges in lending rates are often the chain reaction of deleveraging. When a large amount of ETH is withdrawn from the Aave lending pool, supply contraction pushes lending rates higher, forcing more leverage strategies to liquidate, forming a self-reinforcing loop of "rate rise → forced liquidation → more ETH sold → price drop → further liquidation". Unlocked addresses repaying loans may seem like a neutral debt settlement action, but under extreme market conditions, it can become the trigger for a market stampede.
Step 3: Check for "Liquidation Risk Hedging" — Preemptive Repayment When Health Factor Is Low
[What to do]: Determine whether the address's repayment is an "active strategy adjustment" or a "passive move to avoid liquidation".
[How to do]: Check the historical "Health Factor" records of the address on the lending protocol.
Scenario A: Before repayment, the health factor is close to 1.0 (high risk zone), and rises above 2.0 after repayment → Identified as "passive risk-averse repayment". The address is forced to repay to avoid liquidation when token prices drop or collateral value shrinks. During the sharp ETH price drop in August 2026, multiple whale addresses were forced to sell ETH to pay back loans. Action guidance: The sell pressure accompanying this type of repayment is "forced sell pressure", which usually concentrates during sharp price drops and amplifies downside momentum.
Scenario B: Before repayment, the health factor is > 2.0, and the repayment has no obvious urgency → Identified as "active strategy adjustment". It is more likely to be profit taking or strategy migration, and does not signal market panic. Action guidance: This does not constitute a systemic sell-off signal.
[Completion Criterion]: You have judged whether this repayment is a "forced risk hedging move" or an "active operation".
Common Analysis Mistakes
Many analysts automatically assume that "unlock for debt repayment" equals "tokens are sold", ignoring the other possibility: using unlocked tokens as new collateral to borrow stablecoins for old debt repayment. This "borrow new to repay old" operation generates zero secondary market sell pressure, it only transfers debt from one protocol to another. During the 2025 Ethereum unstaking wave, some institutions migrated funds from decentralized protocols like Lido to centralized staking providers like Figment, which counts as staking ecosystem migration rather than full market exit.
Verification Method After Operation
Enter the target address in DeBank or Aave dashboard, compare the collateral balance changes before and after the repayment. If the collateral (the unlocked token) remains in the account as new collateral after repayment, it means no funds are sold to the market. If the collateral balance drops sharply and transfer records point to centralized exchanges, the operation has generated actual sell pressure.
Follow-Up Action
If the operation is confirmed as "sell tokens to repay debt", track the 24h spot trading volume and exchange net inflow of the corresponding token trading pair in the week around the unlock date. If both metrics rise simultaneously, sell pressure is being released. Verification channels: CryptoQuant's "Exchange Net Inflow" module and the health factor historical records of the lending protocol.
