AVAX, the native token of Avalanche, is currently in a downtrend, facing a critical moment as a significant token unlock approaches. Despite an increase in whale activity, AVAX prices remain below key moving averages, raising concerns about the token’s near-term outlook.
Token Unlock Sparks Uncertainty
AVAX is consolidating in a precarious zone just days before a major network event. On August 20, the Avalanche team will release $240 million worth of tokens into the open market. Most of these tokens will go to the team and strategic investors, including Three Arrows Capital. Historically, such unlocks often trigger price volatility due to the increased circulating supply, which tends to be bearish. However, some AVAX bulls remain optimistic that the token will maintain its ground.
$143M at Risk If Prices Drop Further
The upcoming token unlock will introduce 9.54 million AVAX tokens into the market, distributed among strategic investors, the Avalanche team, the Avalanche Foundation, and community airdrops. Historically, these events are viewed negatively because they dilute the circulating supply. According to data from IntoTheBlock, a significant portion of AVAX holders—74.39%—are currently at a loss. If the price drops below $15, more than $143 million worth of AVAX could become unprofitable.
Whale Activity and Market Dynamics
Despite the downtrend, whale activity around AVAX has surged, with large transactions totaling $131.91 million. However, the concentration of whales holding AVAX has slightly decreased, indicating that some large investors might have been selling. Even so, net inflows from large holders increased by 75.5% over the last week, suggesting that some smart money is betting on a price increase following the token unlock.
Can AVAX Support Whales’ Bet?
From a technical perspective, AVAX is trending downward, trading below both the 50-day EMA at $25.86 and the 200-day EMA at $31.06. These levels act as resistance, reinforcing the bearish trend. The current price is testing the support level around $20.67. If AVAX breaks below this, the next significant support levels are $15.63 and $9.47.
The price is approaching the apex of a falling wedge, a pattern that often signals a bullish reversal if confirmed by an upward breakout. However, the Relative Strength Index (RSI) stands at 38.89, indicating that AVAX is in oversold territory, though not deeply so. This suggests a potential reversal if buying pressure increases. On the other hand, the Chaikin Money Flow (CMF) is negative at -0.13, signaling that selling pressure still dominates.
AVAX Price Prediction
If AVAX manages to break above the falling wedge and surpass the 200-day EMA, it could signal a significant trend reversal. In this case, the price might target a short-term high of around $43.07 and potentially a long-term target of $60.14. However, if the current bearish momentum persists, AVAX could face further declines, with the $15.63 support level being a critical line in the sand.
