As a seasoned crypto investor who’s weathered multiple market cycles and seen my fair share of bull runs and bear markets, I can’t help but feel a mix of anticipation and apprehension when it comes to AVAX. The recent price drop is concerning, especially with the upcoming token unlock looming large. However, as they say, every cloud has a silver lining, and in this case, it might be the potential for a rebound after the FUD subsides.
The cost of Avalanche (AVAX) has been gradually decreasing since the mini-bull rally in March and now finds itself in a crucial stage. However, there’s a potential factor that could increase the bearish trend – the upcoming token unlock which might intensify the downward pressure. On the bright side, after the fear surrounding the token unlock subsides, AVAX’s price may surge vigorously again.
$200M Supply Dilution Impact on AVAX Price
On August 20th, the Avalanche group plans to introduce approximately $200.53 million’s worth of AVAX tokens into general circulation. This large amount might cause a decrease in the current supply, which could possibly result in a rapid drop in the token’s value.
As a researcher, I’m observing that at the moment, Avalanche’s price stands at approximately $20.89. Over the past 24 hours, there’s been a 1.4% decrease in its value, as per CoinGecko’s latest updates. Moreover, Messari Research has reported a record low trading volume on August 19, right before the scheduled token release.
Over the last day, Coinalyze’s analysis shows a decrease of 4.07% in AVAX open interest and a 2.1% fall in its price. This could indicate that numerous traders are liquidating their Long positions, possibly at a loss, as they predict a potential additional price decline ahead.
The AVAX Liquidation Map indicates more Short positions than Long ones, which underscores the tendency of traders closing their Long positions to prevent possible liquidations, reflecting a dominant exit strategy.
Further examination reveals a substantial cluster of purchase orders near the $20.30 mark, suggesting that numerous traders view this price as a robust support. Should the price fall beneath this level, it might provoke liquidations among those who hold these positions.
Avalanche Price Eyes $15 For A Rebound
The forecast for Avalanche suggests it’s experiencing a definite downward trajectory, confined to a falling trendline that has been repeatedly touched since around April 2024. At present, its value hovers close to the bottom of this channel, indicating a possible continued decline.
At present, Avalanche (AVAX) is having difficulty surpassing the middle line of its descending trend and might find a cushion around the lower border, approximately between $19.50 and $20.00. If this support level weakens, the next significant support could potentially be at $16.00, which represents an extension of the channel’s lower boundary.
Conversely, should AVAX successfully surpass the middle line of the downward trending channel approximately at $21.50, the upper limit of this channel, roughly between $24.00 and $25.00, could potentially become a more formidable barrier to further price increases.
As a crypto investor, I’m keeping a close eye on the Stochastic RSI readings. Currently, the RSI line stands at 82.54, which is quite high in relation to its usual range over a 24-hour period. Meanwhile, the signal line sits at 79.30. These figures suggest that the market might be overbought and due for a potential correction, so I’m cautiously considering my investment strategy.
As a researcher, I’m observing an ‘overbought’ situation, which might signal that the demand for buying is reaching its zenith. This could potentially lead to a brief reversal or even the prolongation of the downward trend, considering the current bearish market dynamics.
If AVAX‘s price surges beyond its falling trendline at approximately $27.00, backed by substantial trading activity, this could indicate a flip in market opinion from negative to positive, contradicting the current bearish assumption. The potential next stop for AVAX could be around the $35.00 mark, which coincides with the price movement patterns seen in early May 2024.
Should You Buy AVAX?
AVAX continues to show a steady decline, and its current trend suggests possible further falls due to bearish indicators. The upcoming move is crucial since the price is close to the bottom of the descending channel. The overall market’s mood, particularly Bitcoin‘s performance, could significantly impact AVAX‘s potential to reach these projected higher levels.
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2024-08-20 06:06