AVAX Price Prediction: Token Unlock FUD May Precede an Aggressive Rebound

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.

Avalanche (AVAX) price has been on a steady decline since the mini-bull run in March and is now nearing a critical juncture. As August 20th approaches, a large batch of AVAX tokens are set to be unlocked, which could lead to increased selling pressure and a potential impact on the token's price.

According to data from Messari Research, a significant influx of $200.53 million in Avalanche (AVAX) tokens is expected to hit the open market on August 20th. This large volume of tokens could potentially dilute the existing supply, leading to a sharp decline in the token's price.

As of August 19th, AVAX price is down 1.4% in the last 24 hours, currently trading at $20.89, with a total market cap of $4.6 billion. This marks a significant drop from the all-time high of $146.22 set in April 2023. Moreover, trading volume has also hit a record low on August 19th, according to Messari Research, right before the scheduled token release.

Further analysis using data from Coinalyze reveals that there was a 4.07% decrease in AVAX open interest over the past 24 hours. During this same period, the price experienced a 2.1% decline. This suggests that many traders closed 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 closing their Long positions to avoid potential liquidations.

A closer examination of the order book reveals 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 (AVAX) price prediction: A deeper analysis

A glance at the AVAX 4-hour chart reveals a clear downtrend within a descending channel, which has been tested multiple times since early April 2024. Currently, the price is hovering near the lower boundary of this channel, suggesting a potential further downside.

AVAX is currently facing resistance at the midline of the falling channel, which could lead to support at the lower boundary, ranging from $19.50 to $20.00. If this support fails, the next major support level could be at $16.00, marking the lower extension of the channel.

On the other hand, if AVAX manages to break above the midline of the descending channel at around $21.50, the upper boundary of the channel, between $24.00 and $25.00, will likely present a stronger resistance level.

Finally, 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).

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