- Volatility around the token may be low as it has previously released 60% of its supply.
- AVAX could reach $43.50 if volume continues to support the price action.
The price of Avalanche [AVAX] is up 7.80% in the past 24 hours, according to data from CoinMarketCap. At the time of writing, the token changed hands at $37.48.
Surprisingly, this happened less than four days before the project’s next token unlock.
According to data from the Token Unlocks platform, AVAX has been set up release 2.49% of the total supply in circulation on May 22.
This ratio represents 9.54 million tokens valued at $329 million. When released, this would mean that 62.49% of the total AVAX supply would be part of the circulating supply.
Source: Token Unlocks
AVAX gets a big piece of the pie
Token unlocks are not always great as they come with high volatility. The greater the unlock, the faster the price falls.
However, projects that have acquired approximately 60% to 70% of their supply typically experience low volatility.
In some cases, higher prizes are available, especially in the early stages of the unlock schedule. Interestingly enough, this seems to be the case with AVAX.
To determine the token’s potential, AMBCrypto looked at what happened to the token on-chain. Our first observation was the rising weighted sentiment.
At the time of writing, the weighted sentiment around the Avalanche project was -0.036.
Although the outcome was negative, it was a notable increase from -o.574 on May 15, indicating that participants were abandoning their bearish bias.
Just like the sentiment, also the social dominance pointed. At the time of writing, this metric was 1.046%, meaning discussion about the project has improved.
Source: Santiment
Won’t the price rise stop?
A combination of the negative sentiment and a greater share of social dominance could boost the price.
This could drive AVAX’s price to $40 in the near term, or a very bullish target of $43.50 before the scheduled unlock.
However, traders may need to be cautious. If social dominance becomes too high, it can be a sign of FOMO. FOMO is an acronym for Fear Of Missing Out.
The last time it was higher than press time, AVAX crashed from $35.08 to $31.42 within three days.
On the other hand, if sentiment jumps into positive territory, the bullish thesis could be validated.
Moreover, volume has supported the rising price. At press time, Santiment’s on-chain data showed AVAX volume rising to $534.57 million – the highest level in the past seven days.
Source: Santiment
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Should volume continue to rise while price is rising, a move towards $50 could occur in short order.
However, increasing volume with decreasing price or vice versa would be evidence of decreasing demand. In this case, the bullish forecast may be invalidated.