Avalanche (AVAX) has recently seen a significant price increase. This is in line with the market's bullish signal. However, this altcoin is facing potential bearish events that could impact its price in the coming days.
The upcoming token unlock could increase circulating supply and cause price fluctuations.
Avalanche Awaits Token Unlock
Within the next 24 hours, Avalanche will experience its first token unlock in about three months. 1.67 million AVAX tokens will be released to the market. This unlock is considered a bearish event as the increased supply could exceed demand, potentially putting downward pressure on the price.
This token unlock worth $42.85 million could impact AVAX's price due to additional supply. As a result, the altcoin may struggle to maintain its recent upward momentum. The timing of this event following a price increase suggests AVAX could experience high volatility.
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Despite concerns about token unlock, AVAX's technical indicators show the possibility of continued bullish momentum. The Relative Strength Index (RSI) has recently shown an upward trend, staying above the neutral mark of 50.0.
The RSI's position indicates that AVAX can resist downward pressure. Therefore, it can continue to rise if market conditions remain favorable.
Additional AVAX Price Increase
At the time of writing, AVAX is trading at $25.6, up 12.7% in the last 24 hours. This altcoin is targeting the $26.1 resistance, which has prevented AVAX from advancing for over a month. Breaking this resistance is crucial for continuing the upward trend.
However, the altcoin may struggle to break this key resistance and could enter a correction below $26.1. The upcoming token unlock's supply pressure could limit price movement, with AVAX likely to maintain levels above $24.9. If the token unlock's impact is minimal, the price could stabilize at this level.
Conversely, if the unlock triggers a strong bearish reaction, AVAX could fall below the $24.9 support level. Further decline could see it drop to $23.9 or lower, potentially reaching $22.4. Such a drop would invalidate the neutral thesis and indicate a shift in market sentiment and correction for AVAX.
