9.54 Million AVAX Unlock: What’s Next for Avalanche’s Price?

Avalanche (AVAX) Approaches Major Token Unlock: What’s Next?

On August 20, Avalanche (AVAX) will experience a significant token unlock, releasing 9.54 million tokens into the market. This event is worth approximately $251 million and could introduce substantial volatility into AVAX’s price action.

As the market anticipates this unlock, a divergence in sentiment has emerged between key stakeholders, creating a complex outlook for AVAX’s near-term price movement.

Diverging Sentiment Among Whales and Derivatives Traders

On-chain analysis highlights a striking contrast in behavior between large holders, known as whales, and traders in the derivatives market:

• Whale Accumulation: According to IntoTheBlock’s Large Holders Netflow metric, whale activity has surged by 33.66% over the past week, indicating major accumulation by AVAX’s largest stakeholders.
• Bearish Derivatives Sentiment: Data from Santiment shows a negative funding rate for AVAX, signaling a bearish outlook among traders in the futures market. This typically indicates expectations of price declines.

This divergence between whale behavior and derivatives trader sentiment creates an intriguing dynamic, setting the stage for potential volatility as these conflicting forces play out in the market.

Technical Analysis: AVAX Price Consolidation

From a technical perspective, AVAX’s price action reflects the current uncertainty. The token is consolidating around $21.27, following a brief dip below the critical $20 level on August 8. Despite this drop, AVAX has stabilized within a narrow range.

The Moving Average Convergence Divergence (MACD) indicator is currently bearish, suggesting that a significant breakout may face challenges in the near term. Additionally, the Fibonacci retracement tool highlights key support and resistance levels:

• Support: $20.43
• Resistance: $22.79

Given the current market dynamics, AVAX is likely to continue oscillating between these levels, reflecting the market’s indecision amidst conflicting signals.