How Will AVAX Handle $200M Token Unlock FUD?

Current Price Trend and Token Unlock Impact

AVAX price has been dropping since the March mini-bull run and is currently at a critical juncture. The looming $200 million token unlock might significantly contribute to additional downside pressure. However, there is potential for an aggressive rebound in Avalanche’s price once the unlock FUD subsides.

$200M Supply Dilution Impact on AVAX Price

On August 20, the Avalanche team plans to release $200.53 million worth of AVAX tokens into the market. This substantial influx could lead to supply dilution and a sharp decline in the token’s price.

Currently, the Avalanche price is trading at $20.89, down 1.4% in the last 24 hours, according to CoinGecko. Trading volume has also decreased, with Messari Research reporting an all-time low on August 19, just before the token release.

Further insights from Coinalyze reveal:

• AVAX open interest has dropped 4.07% over the past 24 hours.
• The price has declined by 2.1% during the same period.
• Many traders are closing their Long positions, likely at a loss, in anticipation of further price drops.

The AVAX Liquidation Map indicates a higher number of Shorts compared to Longs, reinforcing the trend of traders exiting Long positions to avoid potential liquidations. A significant concentration of buy orders around the $20.30 level suggests that this price point may act as strong support. However, a breach below this level could trigger liquidations for those holding these positions.

Avalanche Price Eyes $15 For A Rebound

The Avalanche price prediction shows that the asset is in a clear downtrend, moving within a descending channel tested multiple times since early April 2024. Currently trading near the channel’s lower boundary, further downside may be imminent.

Key support levels include:

• Near $19.50 and $20.00.
• If this support fails, the next major support could be at $16.00, marking the channel’s lower extension.

If AVAX breaks above the midline of the descending channel around $21.50, the upper boundary of the channel, between $24.00 and $25.00, is likely to present stronger resistance. The Stochastic RSI is currently at 82.54 (RSI Line) and 79.30 (Signal Line), suggesting an overbought condition and potential short-term pullback or continuation of the downtrend, given the bearish market structure.

A break above the descending channel at $27.00 with strong volume could signal a shift from bearish to bullish sentiment. The next target would be around the $35.00 level, aligning with the price action from early May 2024.

Should You Buy AVAX?

AVAX remains in a strong downtrend with bearish signals indicating potential further downside. The next move is crucial, with the price near the lower boundary of the descending channel. Broader market sentiment, particularly Bitcoin’s performance, could heavily influence AVAX’s ability to reach higher targets.