AVAX Price Volatility Looms as $240M Token Unlock Approaches

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As a seasoned crypto investor with scars from more than a few bear markets, I find myself standing at the precipice of another potential rollercoaster ride with AVAX. The upcoming token unlock, set to release $240 million worth of tokens into the market, has me on edge, especially given the current state of the market and the fact that 74% of holders are already in the red.

In seven days, the Avalanche network is set to release tokens worth $240 million into the market. Most of these tokens will go to the team and strategic investors, including Three Arrows Capital. This event, happening on August 20, could cause price fluctuations, but AVAX supporters believe the asset can withstand it. The current price of AVAX is consolidating in a potentially risky area due to this upcoming token release.

$143M in Jeopardy if Avalanche Drops

In the near future, approximately 9.54 million AVAX tokens will be made available to the market, with a portion going to key investors, the Avalanche development team, the Avalanche Foundation, and also distributed as community rewards in the form of airdrops.

Historically, token unlocks are considered bearish events because they dilute the circulating supply. According to data from IntoTheBlock, 74.39% of AVAX holders are already at a loss, with only 11.78% in profit and 13.83% at break-even. If the price drops below $15, more than $143 million worth of AVAX, including those at break-even, could become unprofitable.

Interestingly, whale activity around AVAX has surged to a weekly high, with large transactions totaling $131.91 million. However, whale concentration in AVAX dropped from 30.37% on August 11 to 29.83% on August 12, indicating that the previous whale activity involved significant selling by large investors.

Despite this, the inflow from large holders increased by 75.5% over the last week, compared to an outflow of 30.65%. This net positive inflow suggests that smart money is betting on a rise in AVAX’s price after the token unlock.

Will AVAX Price Support Whales’ Bet?

Examining the technical breakdown, it appears that the price of Avalanche is decreasing. At this moment, the price has dipped below both the 50-day Moving Average (represented by a green line at $25.86) and the 200-day Moving Average (denoted by a black line at $31.06), suggesting a continued bearish movement. Potential obstacles for AVAX could be found at $25.86 and $31.06. Furthermore, significant resistance might also develop at pivot points, notably R1 at $31.87 and R2 at $38.03.

From another perspective, the cost of Avalanche (AVAX) is currently being assessed at a potential support point of approximately $20.67. If it falls below this mark, key support zones can be found at $15.63 and $9.47 respectively.

The cost is almost reaching the peak of a downward sloping trend line, which could signal a bullish change if it’s followed by an increase in price. However, this shift hasn’t been confirmed yet. The Relative Strength Index (RSI) currently reads 38.89, indicating the asset is slightly oversold but not extremely so, suggesting a possible turnaround if buying activity picks up. On the other hand, the Chaikin Money Flow (CMF) stands at -0.13, showing that selling pressure still outweighs buying pressure, aligning with the ongoing downward trend.

AVAX price prediction shows that if the price breaks above the falling wedge and the 200-day EMA, it could indicate a significant trend reversal and invalidate the current bearish thesis. If the bullish momentum continues, the price could reach a short-term target of around $43.07 (R3 pivot) and a long-term target of approximately $60.14.

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2024-08-13 13:47