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AVAX Price Drops 5% Despite Institutional Investment Wave and ETF Optimism
Avalanche’s (AVAX) price has taken a 5% hit, trading at $23.11 as of writing, amidst a sea of contrasting fundamentals that have both boosted confidence in the token’s prospects and fueled uncertainty around its short-term trajectory.
The latest dip comes as institutional investment waves continue to flow into Avalanche, a testament to its growing appeal among traditional investors. BlackRock’s significant $240 million commitment, combined with VanEck’s $100 million Real World Asset fund targeting AVAX projects, has created an undeniable air of optimism that could potentially fuel a rebound. Bloomberg analysts now estimate a 90% probability of AVAX ETF approval by December 2025, which previously propelled the token to a staggering 10% surge earlier this week.
The technical landscape offers a more mixed narrative, with the Relative Strength Index (RSI) settling at a neutral 51.37. This suggests neither oversold nor overbought conditions, leaving room for potential movement in either direction.
Market participants are now faced with navigating the impending token unlock event on August 15, which is expected to release approximately 1.67 million AVAX tokens, equivalent to around 0.4-0.5% of circulating supply. The uncertainty surrounding this event has already triggered a pullback, as traders weigh their options ahead of Thursday’s key milestone.
The DeFi activity reported on August 7, which saw a surge in total value locked across Avalanche’s DeFi protocols, indicates a remarkable display of genuine adoption rather than speculative trading. This underlying strength is crucial for maintaining the token’s momentum.
In terms of technical analysis, the current price action presents mixed signals from a consolidation perspective. Despite the neutral RSI, the Moving Average Convergence Divergence (MACD) histogram has shown bearish divergence at -0.0839, hinting at weakening upward momentum despite the broader bullish trend. As AVAX currently sits below key moving averages, including SMA 7 and SMA 20, both serving as immediate resistance.
Critical support levels have emerged at $20.57, with a deeper layer of strong support found at $16.94. A reclaim above the $23.50 mark would signal renewed buying interest ahead of the December ETF decision timeline, while a break below the former support could accelerate selling pressure into Thursday’s token unlock event.
In conclusion, AVAX faces a critical juncture as institutional investment waves collide with near-term uncertainty surrounding the upcoming token unlock. While the recent price drop may pose challenges for short-term traders, the strong fundamental backdrop driven by these investments suggests that any weakness could prove temporary.
As such, it is essential to closely monitor the $20.57 support level over the next 48 hours, as a break below this point could accelerate selling pressure into Thursday’s pivotal event.
Source: Blockchain.News
