TLDR
- AVAX price is facing potential downward pressure due to a $200.53 million token unlock scheduled for August 20, 2024.
- Despite bearish signals, some analysts suggest a possible rebound after the token unlock “FUD” (fear, uncertainty, doubt) subsides.
- AVAX is currently trading at $20.89, down 1.4% in the last 24 hours, with trading volume reaching an all-time low just before the scheduled token release.
- Technical analysis shows AVAX trading in a descending channel since April 2024, with potential support levels at $19.50-$20.00 and $16.00.
Avalanche (AVAX), a leading player in the Real World Asset (RWA) coin market, is navigating through a crucial period as it faces both challenges and opportunities.
The cryptocurrency is currently trading at $20.89, down 1.4% in the last 24 hours, according to recent data from CoinGecko.
The most immediate concern for AVAX is the scheduled token unlock set for August 20, 2024. This event will release $200.53 million worth of AVAX tokens into the open market, potentially diluting the existing supply and exerting downward pressure on the price.
The anticipation of this unlock has already impacted trading activity, with Messari Research reporting an all-time low in trading volume on August 19.
Technical analysis reveals that AVAX has been trading within a descending channel since early April 2024. The price is currently near the lower boundary of this channel, suggesting potential further downside. Key support levels to watch are between $19.50 and $20.00, with the next major support at $16.00 if these levels fail to hold.
Despite these bearish signals, some analysts suggest a possible rebound after the token unlock “FUD” (fear, uncertainty, doubt) subsides. The Stochastic RSI, currently in overbought territory at 82.54 (RSI Line) and 79.30 (Signal Line), indicates that buying pressure may be peaking.
This could lead to a short-term pullback or continuation of the downtrend, especially given the prevailing bearish market structure.
The project continues to lead the RWA coin market, aiming for an ambitious $10 billion market cap. As of the latest data, AVAX’s market cap stands at $8.09 billion, showing steady progress towards this goal.
The robust Avalanche ecosystem, bolstered by recent initiatives like the Codebase Season 2 incubator, sets the stage for potential growth. This program offers builders a chance to secure a $50,000 non-dilutive stipend and compete for a share of a $1 million prize pool, which is expected to generate increased interest in the network.
From a broader perspective, AVAX has shown resilience in the face of market volatility. The cryptocurrency has been trading within an ascending channel that began on August 6, following a significant market downturn on August 5 that saw over $1 billion in leveraged positions liquidated across the crypto market.
This pattern, featuring a flat upper resistance line and a rising lower support line, suggests that buyers are gradually gaining strength.
Adding to the mixed signals, the Moving Average Convergence/Divergence (MACD) indicator recently showed a positive shift. On August 17, the MACD line crossed above the signal line, a classic buy signal indicating that short-term averages are overtaking long-term ones. This crossover is often interpreted as a sign of potential price gains.
The Relative Strength Index (RSI) currently stands at 39.53, below the neutral threshold of 50, suggesting that selling pressure remains dominant. Additionally, the Chaikin Money Flow (CMF) remains in negative territory, indicating that buying activity is insufficient to counterbalance ongoing selling pressure.
