- This week, $400 million worth of AVAX tokens will be unlocked, posing a potential surge in selling pressure for the cryptocurrency market.
- The unlocking event signifies a substantial release of AVAX tokens into circulation, sparking worries about a possible price downturn.
- Analysis of weekly and daily charts indicates that bullish sentiment may prevail in the near term.
- AVAX could encounter resistance at the $50 mark, hindering its upward trajectory despite potential short-term fluctuations.
Avalanche, a cryptocurrency, showcased an impressive price performance, especially during the final quarter of 2023.
Recent observations indicate that its price has remained stable, even exhibiting a modest increase of approximately 5% over the past week.
However, concerns loom on the horizon.
A substantial amount of nearly $400 million worth of AVAX is poised to be unlocked on February 21, 2024, potentially leading to significant selling pressure.
The impending token unlock, totaling 10.24 million AVAX tokens, translates to a staggering $376.61 million at the current market value of $40 per AVAX.
This unlocking event is part of the Genesis distribution of Avalanche, involving the distribution of 360 million AVAX tokens to various entities, each with distinct vesting schedules and conditions.
Scheduled for February 21, this unlock represents approximately 2.6% of the circulating supply of the cryptocurrency, estimated at about 367.51 million AVAX.
Furthermore, the current trading volume for Avalanche is approximately $478,649,879, making the impending unlock equivalent to about 63% of this volume.
Such a significant influx of tokens into the market has the potential to disrupt the delicate balance between supply and demand, potentially resulting in a considerable price downturn for AVAX.
Assessing the current market sentiment, Avalanche has exhibited minimal upward movement, with a marginal increase of only 0.1% in the past day, which is relatively subdued considering the overall market performance.
Analyzing the weekly chart, Avalanche rebounded from its 20-week Exponential Moving Average (EMA) around $27 on January 22, following its rejection from the $50 mark.
Zooming into the daily chart, Avalanche appears to be supported by its 20-day EMA, suggesting stability in the short term.
However, caution is advised if AVAX breaches the $38.44 mark, where the moving average resides.
Despite the potential challenges, Avalanche remains buoyed by an ascending trendline, indicating ongoing bullish sentiment over the medium term.
While the $50 resistance level remains a critical battleground, AVAX's upward trajectory appears intact, with significant downside risks only materializing below the $38.44 to $34 range.
Disclaimer: While Voice of Crypto endeavors to provide accurate and timely information, readers are advised to conduct their own research and exercise discretion, given the highly volatile nature of cryptocurrencies.
