Rising investor interest suggests that AVAX may be ready for a change despite past unlock outcomes.
- Volatility around the token may be low, considering it has previously released 60% of its supply. AVAX might hit $43.50 if the volume continues to back the price action.
The price of Avalanche [AVAX] has increased by 7.80% in the last 24 hours, according to data from CoinMarketCap. At press time, the token changed hands at $37.48.
Surprisingly, this was happening less than four days before the next token unlock of the project.
According to data from the Token Unlocks platform, AVAX is set to release 2.49% of its total supply into circulation on the 22nd of May.
This ratio represents 9.54 million tokens, valued at $329 million. When released, it would imply that 62.49% of the total AVAX supply would be part of the circulating supply.
Source: Token Unlocks
AVAX gets a big share of the pie
Token unlocks are not always great considering that they come with great volatility. The bigger the unlock, the harder the price decreases.
However, projects that have vested about 60% to 70% of their supply tend to experience low volatility.
In some cases, they come at higher prices, especially in the early stages of the unlock schedule. Interestingly, this seems to be the case with AVAX.
To ascertain the token’s potential, AMBCrypto looked at what was happening with the token on-chain. Our first observation was the rising Weighted Sentiment.
As of this writing, the Weighted Sentiment around the Avalanche project was -0.036.
Though the reading was negative, it was a notable increase from -o.574 on the 15th of May, indicating that participants were quitting their bearish bias.
Like the sentiment, the Social Dominance also spiked. At press time, this metric was 1.046%, meaning that the discussion about the project has improved.
Source: Santiment
No stopping the price increase?
A combination of the negative sentiment and an increased share of social dominance could be great for the price.
This could drive AVAX’s price to $40 in the short term, or a highly bullish target of $43.50 before the scheduled unlock.
However, traders might need to be careful. If the social dominance gets too high, it could be a sign of FOMO. FOMO is an acronym for Fear Of Missing Out.
The last time, the metric was higher than its press time reading, AVAX crashed from $35.08 to $31.42 within three days.
On the other hand, if the sentiment jumps into the positive region, the bullish thesis could be validated.
In addition, the volume has backed the increasing price. At press time, Santiment’s on-chain data revealed that AVAX’s volume was up to $534.57 million— the highest it has reached in the last seven days.
Source: Santiment
Is your portfolio green? Check the AVAX Profit Calculator
Should the volume continue to increase while the price rises, a move toward $50 could happen within a short while.
However, a rising volume with a decreasing price or vice versa would be evidence of decreasing demand. In this case, the bullish prediction could be invalidated.
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