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AVAX Price Drops 5% Despite Institutional Investment Wave and ETF Optimism
Despite significant institutional developments over the past week, AVAX price has retreated from recent highs as traders position ahead of Thursday’s token unlock event. The impending release of approximately 1.67 million AVAX tokens, representing 0.4-0.5% of circulating supply, has generated selling pressure among market participants.
This short-term weakness comes despite substantial institutional validation. BlackRock’s $240 million investment and VanEck’s $100 million Real World Asset fund targeting AVAX projects have fundamentally shifted institutional sentiment. Bloomberg analysts now estimate a 90% probability of AVAX ETF approval by December 2025, which previously fueled the token’s 10% surge earlier this week.
The recent DeFi activity surge reported on August 7, when AVAX price rose 2.58% to $22.64, demonstrates strong underlying network fundamentals. DefiLlama data shows substantial increases in total value locked across Avalanche’s DeFi protocols, indicating genuine adoption rather than speculative trading.
AVAX Technical Analysis: Mixed Signals in Consolidation Phase
AVAX technical analysis reveals a consolidation pattern with conflicting momentum signals. AVAX RSI at 51.37 indicates neutral territory, suggesting neither oversold nor overbought conditions. However, Avalanche’s MACD histogram shows bearish divergence at -0.0839, indicating weakening upward momentum despite the overall bullish trend.
The current AVAX price of $23.11 sits just below key moving averages, with Avalanche’s SMA 7 at $23.33 and SMA 20 at $23.31 acting as immediate resistance.
More significantly, AVAX has maintained its position above critical SMA 50 at $21.55 and SMA 200 at $21.89, preserving the longer-term bullish structure.
Avalanche’s Bollinger Bands positioning at 0.4622 suggests that AVAX is trading in the lower half of its recent range but hasn’t reached oversold extremes. The daily ATR of $1.42 indicates moderate volatility typical for AVAX during consolidation phases.
AVAX Price Levels: Key Support and Resistance
Based on Binance spot market data, critical Avalanche support levels emerge at $20.57 for immediate support and $16.94 for strong support.
The immediate support at $20.57 aligns closely with the psychological $20 level, which represents a key test for AVAX bulls.
AVAX resistance remains firm at $27.38, which has capped recent rallies and serves as the next major breakout target. A sustained move above this level could trigger momentum toward the 52-week high of $53.98, although it involves multiple intermediate resistance zones.
The current trading range between $22.65 and $24.37 defines short-term boundaries for AVAX/USDT, with traders monitoring a decisive break in either direction.
Should You Buy AVAX Now?
Risk-Reward Analysis
For swing traders, the present AVAX price presents a nuanced opportunity.
Conservative traders may wait for AVAX to reclaim $23.50 resistance before establishing long positions.
Aggressive buyers could consider accumulating near the $20.57 support level using strong support at $16.94 as a stop-loss reference.
This strategy offers a favorable risk-reward ratio if Avalanche maintains its bullish trajectory toward $27.38 resistance.
Long-term investors benefit from institutional backing and ETF approval prospects, making current weakness potentially attractive for dollar-cost averaging strategies.
Source: Blockchain.News
