Market Update: Avalanche (AVAX) Sees Uncertainty Amid Institutional Support and Token Unlock Event

AVAX Price Drops 5% Despite Institutional Investment Wave and ETF Optimism

The Avalanche (AVAX) price has experienced a significant decline of 4.97% in the past 24 hours, trading at $23.11 as the market grapples with near-term uncertainty. The sudden drop may be attributed to traders positioning ahead of the upcoming token unlock event scheduled for August 15. This event is expected to release approximately 1.67 million AVAX tokens, representing a modest 0.4-0.5% of the circulating supply.

Despite the recent decline, institutional investors continue to demonstrate strong support for Avalanche’s prospects. The addition of BlackRock’s $240 million investment and VanEck’s $100 million Real World Asset fund targeting AVAX projects have greatly shifted institutional sentiment in favor of the token. Bloomberg analysts now estimate a 90% probability of an AVAX ETF approval by December 2025, which previously drove the token’s impressive 10% surge earlier this week.

In other news, DeFi activity has seen significant increases across Avalanche’s DeFi protocols, indicating genuine adoption and not mere speculative trading. According to DefiLlama data, substantial gains in total value locked have been recorded on these platforms. This development provides a strong fundamental backdrop for long-term investors, with current weakness potentially being an attractive opportunity for dollar-cost averaging strategies.

Turning our attention to the technical side of the market, we find ourselves in a mixed signals consolidation phase. The RSI (Relative Strength Index) at 51.37 suggests neither oversold nor overbought conditions, indicating room for further movement in either direction. However, the MACD (Moving Average Convergence Divergence) momentum displays bearish divergence, warning of weakening upward momentum despite the overall bullish trend.

Key levels to keep an eye on include immediate support at $20.57 and strong support at $16.94. Meanwhile, resistance remains at $27.38, which has capped recent rallies and could potentially trigger a significant breakout if surpassed.

Swing traders are faced with a complex decision: buy or wait. The risk-reward ratio suggests this uncertainty is driven by the aforementioned token unlock event. Conservative investors may choose to wait for AVAX to reclaim $23.50 resistance before establishing long positions, while aggressive buyers might look to accumulate near the $20.57 support level. For day traders, the current range between $22.65 and $24.37 serves as the battleground for bulls and bears.

In conclusion, Avalanche’s token unlock event has created a critical juncture in which the market is weighing near-term uncertainty against strong institutional backing. Any weakness may prove temporary as institutions continue to drive optimism. A decisive break above or below these key levels will likely trigger a significant move ahead of the crucial December ETF decision timeline.

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Source: Blockchain.News