AVAX Price Consolidates in a Critical Zone Ahead of Major Token Unlock

AVAX Price Consolidates in a Critical Zone Ahead of Major Token Unlock

With just seven days remaining before Avalanche’s final network token unlock, AVAX is consolidating in a precarious position. On August 20, the Avalanche team plans to release $240 million worth of AVAX tokens to the open market. The majority of these tokens will be distributed to the team and strategic investors, notably Three Arrows Capital. This event is expected to induce price volatility, though AVAX bulls remain optimistic about the asset’s stability.

$143 Million at Risk If Avalanche Price Falls

The upcoming token unlock will see 9.54 million AVAX tokens entering the market, allocated among strategic investors, the Avalanche team, the Avalanche Foundation, and community airdrops.

Historically, token unlocks are perceived as bearish events due to the increased circulating supply. According to IntoTheBlock, 74.39% of AVAX holders are currently experiencing losses, with only 11.78% in profit and 13.83% breaking even. Should the price dip below $15, over $143 million in AVAX holdings, including those at break-even, could become unprofitable.

Despite this, whale activity in 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, suggesting that significant selling by large investors has occurred.

Interestingly, the inflow from large holders increased by 75.5% over the past week, while outflows decreased by 30.65%. This net positive inflow indicates that institutional investors are betting on a potential rise in AVAX’s price post-unlock.

Will AVAX Price Support the Optimistic Bet?

From a technical perspective, the Avalanche price is currently on a downward trajectory. It is trading below both the 50-day EMA (green line at $25.86) and the 200-day EMA (black line at $31.06), highlighting the bearish trend. Resistance levels are expected around $25.86 and $31.06, with additional resistance at R1 ($31.87) and R2 ($38.03).

Conversely, AVAX is testing the support level at $20.67. A break below this support could lead to further declines, with significant support levels at $15.63 and $9.47.

The price is approaching the apex of a falling wedge pattern, which could signal a bullish reversal if confirmed by an upward breakout. The Relative Strength Index (RSI) stands at 38.89, indicating that the asset is in oversold territory, which could signal a potential reversal if buying pressure increases. Meanwhile, the Chaikin Money Flow (CMF) is negative at -0.13, suggesting that selling pressure remains dominant.

If AVAX breaks above the falling wedge and the 200-day EMA, it could signal a substantial trend reversal and challenge the current bearish outlook. If bullish momentum persists, the price could target a short-term level of around $43.07 (R3 pivot) and a long-term target of approximately $60.14.