Avalanche (AVAX) bulls have held firm at the $10 resistance zone amid selling pressure from the $100 million token unlock on August 26. On-chain data analysis weighs the possibility of an AVAX price rebound in the coming weeks.
Avalanche (AVAX) price continues to consolidate around the $10 range. As the bulls and bears face off that critical $10 support level, on-chain data analysis explores which bloc of investors will likely come out top.
Avalanche Whales are Soaking Up the Inflationary Pressure
On August 26, the Avalanche team executed a much-heralded token unlock event, which saw 9.54 million AVAX tokens released into circulation. However, on-chain data shows that bullish Avalanche whales are making spirited efforts to soak up the inflationary pressure.
The IntoTheBlock chart below shows that the Net Inflows into Large Holder wallets have risen this week. And on August 31, it reached a two-month peak of 2.46 million AVAX.
IntoTheBlock’s Large Holder wallets reference addresses holding at least 0.1% of the total tokens in circulation. In the case of AVAX, that threshold would be 353,496.24 AVAX or investors with holdings worth $3.5 million.
The chart above illustrates how this group of millionaire Avalanche investors began making noticeable efforts to soak up the selling pressure right after the August 26 token unlock event.
AVAX will likely avoid a prolonged price correction if they keep up with this trend.
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Strategic Investors Could Capitalize on the Negative Sentiment
As the token unlock event approached, the mood within the Avalanche ecosystem became noticeably poignant. Evidently, the chart below illustrates how the AVAX Weighted Sentiment trended deep into the negative territory at -2.56 on August 21. After a week of wild fluctuations, it still currently sits in the red zone at -0.5.
The Weighted Sentiment metric evaluates the overall mood within a particular blockchain community. Essentially, it weighs the number of positive comments about the project against the negative mentions.
When Weighted Sentiment trends negatively during a price correction, strategic investors could interpret the widespread panic as the perfect time to swoop in to buy the dip.
With Avalanche price now under bearish pressure, investors buying the dip could inadvertently trigger a recovery if this premise holds true.
AVAX Price Prediction: Consolidation Above $9
If bullish whales continue capitalizing on the negative sentiment, they could absorb the bearish pressure and keep the AVAX price above $9.
The In/Out of Money Around Price data, which depicts the purchase price distribution of the current Avalanch holders, also supports this prediction.
It highlights that 77,450 investors had bought 3.17 million AVAX tokens at the minimum price of $9.83. As predicted, they could offer considerable support, especially if the large holders continue to buy.
But if the bears can push past that support level, Avalanch price could slip below $9 under intense inflationary pressure.
Yet, if the market FUD subsides, the bulls could potentially force an upswing above $13. However, 697,000 addresses had bought 17.2 million AVAX at the average price of $11.60. And if they chose to book profits early, AVAX price could retrace again.
But if that resistance level cannot hold, ADA price could eventually reclaim $13. However, large clusters of buyers in a loss can be seen on the chart above – indicating there is currently more resistance than support for AVAX.
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