NOIDA (CoinChapter.com) — Avalanche’s upcoming token unlock could create a bearish tailwind for its native token, AVAX, in a bullish outlook for the token driven by partnerships and bullish technical patterns.
In February 2024, the Avalanche network will unlock approximately 9.54 million AVAX tokens, worth approximately $320 million. Such a move would increase liquidity and potential selling pressure as early investors could liquidate their holdings.
This unlock coincides with the anticipated altcoin season following the Bitcoin consolidation phase following the approval of the US spot ETF, signaling a dynamic shift in market trends and investor strategies.
However, the Avalanche team can negate the bearish impact of token unlocks through partnerships. Avalanche recently partnered with Skypath Securities to develop a mobile defense platform.
Additionally, Salvor, the Avalanche-based peer-to-peer NFT lending protocol, engaged security firm Omniscia to audit Salvor’s contracts.
Avalanche also announced strategic partnerships with traditional financial giants such as JPMorgan Chase and CitiBank for the RWA project. apply A corporate blockchain infrastructure is required.
Additionally, the AVAX team launched a $50 million fund dedicated to RWA research and development in December 2023. Avalanche is also positioning itself in the GameFi sector, attracting top gaming studios with its scalable blockchain architecture.
AVAX’s bullish pattern could negate the impact of token unlocking
The Avalanche token is ‘bull flag pattern.’
A bull flag consists of a flagpole, which is the result of an almost vertical rise in the price of a cryptocurrency token. Assets that are in a strong upward trend often form patterns.
A steep upward trend followed by a period of sideways movement forms the flag of the pattern. Despite the strong vertical rally, asset prices are not falling as buying forces remain. As a result, a breakout of the flag pattern often results in a strong upward trend.
Once the price breaks out of the flag area, the pattern is completed and continues the previous uptrend. Traders calculate the target price for a breakout by adding the length of the flagpole to the breakout price level.
Following technical analysis rules, AVAX price could rise by over 418% if the pattern is confirmed, reaching the theoretical price target near $206.
Bears push AVAX price.
Meanwhile, bears pared AVAX gains on February 11, ending a four-day bull market for the token. If the bears continue to push the token price lower, AVAX could fall near the 20-day EMA (red wave) support level of $36.
A fall below the immediate support line could force the token to test support near $30.
On the other hand, if the Avalanche partnership helps avoid the bearish outlook after unlocking the token, the token could bounce back to resistance near $44.4. Moreover, a reversal of immediate resistance could help AVAX price target resistance near $51 before a pullback.
AVAX’s RSI remained neutral at 62.5 on the daily chart.