AVAX Price Volatility Looms as $240M Token Unlock Approaches

AVAX price consolidates in a dangerous zone, just seven days from its final network token unlock. The Avalanche team will release a total of $240 million worth of tokens to the open market, with the majority going to the team and strategic investors, key among them Three Arrows Capital. The event, which will take place on August 20, is anticipated to create price volatility, but AVAX bulls think the asset will hold on just fine.

$143M in Jeopardy if Avalanche Drops

The upcoming token unlock will release 9.54 million AVAX tokens into the market and distribute them among strategic investors, the Avalanche team, the Avalanche Foundation, and community airdrops.

Historically, token unlocks are considered bearish events because they dilute the circulating supply. According to data from IntoTheBlock, 74.39% of AVAX holders are already at a loss, with only 11.78% in profit and 13.83% at break-even. If the price drops below $15, more than $143 million worth of AVAX, including those at break-even, could become unprofitable.

Interestingly, whale activity around 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, indicating that the previous whale activity involved significant selling by large investors.

Despite this, the inflow from large holders increased by 75.5% over the last week, compared to an outflow of 30.65%. This net positive inflow suggests that smart money is betting on a rise in AVAX’s price after the token unlock.

Will AVAX Price Support Whales’ Bet?

Delving into the technical analysis, Avalanche price is trending downward. The price is currently below both the 50-day EMA (green line at $25.86) and the 200-day EMA (black line at $31.06), reinforcing the bearish trend. AVAX may encounter resistance at $25.86 and $31.06. Pivot points indicate additional resistance levels, particularly R1 at $31.87 and R2 at $38.03.

On the flip side, AVAX price is testing the support level around $20.67. Should it break below this, the next significant support levels are $15.63 and $9.47.

The price is nearing the apex of a falling wedge, a bullish reversal pattern if confirmed by an upward breakout, though confirmation has yet to occur. The Relative Strength Index (RSI) stands at 38.89, suggesting the asset is in oversold territory but not deeply so, hinting at a potential reversal if buying pressure increases. Meanwhile, the Chaikin Money Flow (CMF) is negative at -0.13, indicating that selling pressure still dominates, consistent with the ongoing downtrend.

AVAX price prediction shows that if the price breaks above the falling wedge and the 200-day EMA, it could indicate a significant trend reversal and invalidate the current bearish thesis. If the bullish momentum continues, the price could reach a short-term target of around $43.07 (R3 pivot) and a long-term target of approximately $60.14.