AVAX Price Analysis: Will Price Survive $200M Token Unlock FUD?
AVAX price has been dropping since the March mini-bull run and is currently in a critical position. Meanwhile, the looming token unlock may contribute significantly to more downside pressure. Nevertheless, there is a silver lining in this situation, as the price of Avalanche may rebound aggressively after the unlock FUD dies down.
$200M Supply Dilution Impact on AVAX Price
On August 20, the Avalanche team is set to release $200.53 million worth of AVAX tokens into the open market. This significant influx could dilute the existing supply, potentially leading to 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 taken a hit, with Messari Research reporting an all-time low on August 19, just before the scheduled token release.
Further insights from Coinalyze reveal that AVAX open interest has dropped 4.07% over the past 24 hours, while the price has declined by 2.1% during the same period. This suggests that many traders are closing their Long positions, likely at a loss, in anticipation of a further price drop.
The AVAX Liquidation Map also shows a higher number of Shorts compared to Longs, reinforcing the trend of traders exiting Long positions to avoid potential liquidations.
Additionally, a deeper analysis shows there is a significant concentration of buy orders around the $20.30 level, indicating that many traders believe this price point could act as a strong support. However, if the price breaks below this level, it could trigger liquidations for those holding these positions.
Avalanche Price Eyes $15 For A Rebound
Avalanche price prediction shows the asset is in a clear downtrend, moving within a descending channel that has been tested multiple times since early April 2024. The price is currently trading near the lower boundary of this channel, suggesting a potential further downside.
AVAX is currently struggling to break above the midline of the falling channel and may find support near the lower boundary, which lies between $19.50 and $20.00. Should this support level fail, the next major support could be at $16.00, marking the channel’s lower extension.
On the flip side, if AVAX manages to break above the midline of the descending channel around $21.50, the upper boundary of the channel, between $24.00 and $25.00, will likely present a stronger resistance level.
The Stochastic RSI, which measures the relative strength index (RSI) in relation to its own high/low range over 24 hours, is currently at 82.54 (RSI Line) and 79.30 (Signal Line).
This overbought condition suggests that buying pressure may be peaking, indicating a potential short-term pullback or continuation of the downtrend, especially given the prevailing bearish market structure.
If AVAX price breaks above the descending channel at $27.00 with strong volume, it would signal a shift in market sentiment from bearish to bullish, invalidating the current bearish thesis. The next target would be around the $35.00 level, which aligns with the price action from early May 2024.
Should You Buy AVAX?
AVAX remains in a strong downtrend, with bearish signals suggesting potential further downside. The next move is critical, with the price near the lower boundary of the descending channel. Broader market sentiment, especially the Bitcoin performance, could heavily influence the ability of AVAX price to reach these higher targets.
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