Avalanche price has entered a bear market this month after falling 45% from its peak in September, and this pullback may continue ahead of a major token unlock.
Summary
- Avalanche’s price has plummeted in recent weeks.
- The network will unlock nearly $35 million worth of tokens this week.
- Technical analysis points to further decline as transactions fall.
The Avalanche token (AVAX) fell to the psychological point of $20, well below the September high of $36. It is hovering around its lowest point on October 11.
The main catalyst for AVAX price this week will be an upcoming block on October 24. It will unlock 1.67 million tokens currently valued at almost $35 million.
Avalanche has now unlocked around 60% of all its tokens, and the process will continue at least until 2030. Token unlocks are often considered bearish as they increase the number of those in circulation.
AVAX price has also pulled back as data shows ecosystem growth has receded. According to Nansen, the number of transactions on the network fell 18% in the last seven days to 11.1 million.
This drop has affected the money the network earns in fees. Its rates fell 61% in the last seven days to $345,000. On the bright side, Avalanche’s monthly fees have increased by 120%, to $2.14 million.
Avalanche fees have an impact on the token because the network burns them all. As a result, the latest data shows that the flaring rate has increased, and the cumulative total has surpassed the critical milestone of 4.87 million.
Avalanche price has other potential catalysts that may help offset the impact of the upcoming unlock. For example, it has become a major player in the stablecoin industry, where the circulating supply has increased to $1.7 billion.
Avalanche has become one of the leading blockchains for real-world asset (RWA) tokenization, now hosting over $740 million in tokenized assets and among the top five RWA networks.
Major financial institutions such as SkyBridge Capital and Grove Finance have contributed to that growth by tokenizing over $550 million worth of hedge funds and credit products on the platform.
Recently, Wyoming launched FRNT, the first US state-issued stablecoin, on Avalanche, marking a regulatory and operational milestone for government payments made on-chain.
Avalanche Price Technical Analysis
The daily time chart shows that AVAX price has been under pressure in recent weeks. It plummeted from a high of $36 on September 23 to a low of $17 as the crypto market crashed.
Its lowest point this month was notable as it coincided with the lowest swings in April, June and October. It has also moved below the 50-day and 200-day weighted moving averages.
Further falls can put you at risk of forming the death cross pattern, which often leads to more falls. Therefore, the most likely scenario is that the currency falls to the October low of $17. A break below that level will point to further declines, potentially to $15.
