Avalanche (AVAX) On Chain Data Analysis and Price Predictions

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As Avalanche (AVAX) treads water around the $10 resistance zone, investors and analysts closely monitor the cryptocurrency’s price movements in the face of selling pressure stemming from the $100 million token unlock event that occurred on August 26. On-chain data analysis offers insights into the potential outcomes for AVAX in the coming weeks.

Avalanche Whales Absorbing Inflationary Pressure

The recent token unlock event released 9.54 million AVAX tokens into circulation. Despite this influx of tokens, on-chain data reveals that bullish Avalanche whales are actively working to absorb the resulting inflationary pressure. Large holders, those with at least 0.1% of the total AVAX supply (equivalent to 353,496.24 AVAX or $3.5 million), have seen a noticeable increase in net inflows. On August 31, it reached a two-month peak of 2.46 million AVAX.

This trend suggests that affluent AVAX investors are strategically accumulating tokens, potentially signaling confidence in the cryptocurrency’s future. If this accumulation continues, it could serve as a buffer against prolonged price corrections.

Capitalizing on Negative Sentiment

As the token unlock event approached, negative sentiment within the Avalanche community became palpable. The AVAX Weighted Sentiment metric dipped into negative territory at -2.56 on August 21 and currently lingers at -0.5. This metric gauges the overall mood within the community by weighing positive and negative mentions of the project.

During price corrections, a negative trend in Weighted Sentiment can be seen as an opportunity for strategic investors. They may interpret widespread panic as a signal to buy the dip. Should these investors step in and accumulate AVAX at lower prices, it could potentially trigger a price recovery.

Price Predictions and Consolidation

Looking ahead, if bullish whales continue to counteract negative sentiment, AVAX’s price may remain above the $9 mark. On-chain data, such as the In/Out of Money Around Price data, suggests that there is substantial support from investors who bought AVAX at the minimum price of $9.83. This support could prove crucial in maintaining price stability.

However, if bearish forces manage to breach this support level, AVAX could experience downward pressure, potentially slipping below $9 under intense inflationary pressure.

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On the upside, if market fear and uncertainty subside, bullish momentum could propel AVAX above $13. Nevertheless, the presence of a significant number of addresses that bought AVAX at an average price of $11.60 suggests potential resistance at this level.

Ultimately, the cryptocurrency market’s future remains uncertain, and AVAX’s price trajectory will depend on the interplay of various factors, including investor sentiment, on-chain data, and broader market conditions. Traders and investors should exercise caution and stay vigilant in response to evolving trends in the Avalanche ecosystem.