AVAX Price Drops 5% Despite Institutional Investment Wave and ETF Optimism
Rongchai Wang Aug 12, 2025 07:31
Avalanche trades at $23.11 after a 4.97% decline, testing key support levels as traders weigh upcoming token unlock against strong institutional backing.
Quick Take
• AVAX currently trading at $23.11 (-4.97% in 24h) • Avalanche's RSI sits neutral at 51.37 with bearish MACD momentum • Strong institutional investments from BlackRock and VanEck drive optimism despite recent pullback • Upcoming 1.67 million AVAX token unlock on August 15 creates near-term uncertainty
What's Driving Avalanche Price Today?
Despite significant institutional developments over the past week, AVAX price has retreated from recent highs as traders position ahead of Thursday's token unlock event. The upcoming release of approximately 1.67 million AVAX tokens, representing 0.4-0.5% of circulating supply, has created selling pressure as market participants anticipate potential downward impact.
This short-term weakness comes even as Avalanche received major institutional validation. BlackRock's $240 million investment and VanEck's $100 million Real World Asset fund targeting AVAX projects have fundamentally shifted institutional sentiment. Bloomberg analysts now estimate a 90% probability of AVAX ETF approval by December 2025, which previously drove the token's 10% surge earlier this week.
The DeFi activity surge reported on August 7, when AVAX price rose 2.58% to $22.64, demonstrates strong underlying network fundamentals. DefiLlama data showed substantial increases in total value locked across Avalanche's DeFi protocols, indicating genuine adoption rather than speculative trading.
AVAX Technical Analysis: Mixed Signals in Consolidation Phase
Avalanche technical analysis reveals a consolidation pattern with conflicting momentum signals. AVAX RSI at 51.37 indicates neutral territory, suggesting neither oversold nor overbought conditions. However, Avalanche's MACD histogram shows bearish divergence at -0.0839, indicating weakening upward momentum despite the overall bullish trend.
The current AVAX price of $23.11 sits just below the key moving averages, with Avalanche's SMA 7 at $23.33 and SMA 20 at $23.31 acting as immediate resistance. More significantly, AVAX has maintained its position above the critical SMA 50 at $21.55 and SMA 200 at $21.89, preserving the longer-term bullish structure.
Avalanche's Bollinger Bands positioning at 0.4622 suggests AVAX is trading in the lower half of its recent range but hasn't reached oversold extremes. The daily ATR of $1.42 indicates moderate volatility, typical for AVAX during consolidation phases.
Avalanche Price Levels: Key Support and Resistance
Based on Binance spot market data, critical Avalanche support levels emerge at $20.57 for immediate support and $16.94 for strong support. The immediate support at $20.57 aligns closely with the psychological $20 level and represents a key test for AVAX bulls.
AVAX resistance stands firm at $27.38, which has capped recent rallies and represents the next major breakout target. A sustained move above this level could trigger momentum toward the 52-week high of $53.98, though the path involves multiple intermediate resistance zones.
The current trading range between $22.65 and $24.37 defines short-term boundaries for AVAX/USDT, with traders watching for a decisive break in either direction. The pivot point at $23.38 serves as the critical battle line between bulls and bears.
Should You Buy AVAX Now? Risk-Reward Analysis
For swing traders, the current AVAX price presents a nuanced opportunity. The institutional backing provides strong fundamental support, while the technical setup suggests potential for both directions. Conservative traders might wait for AVAX to reclaim $23.50 resistance before establishing long positions.
Aggressive buyers could consider accumulating near the $20.57 support level, using the strong support at $16.94 as a stop-loss reference. This strategy offers a favorable risk-reward ratio if Avalanche maintains its bullish trajectory toward $27.38 resistance.
Long-term investors benefit from the institutional validation and ETF approval prospects, making current weakness potentially attractive for dollar-cost averaging strategies. However, the August 15 token unlock introduces near-term volatility that requires careful position sizing.
Day traders should focus on the $22.65-$24.37 range, with clear breaks above or below these levels potentially triggering extended moves. The neutral AVAX RSI provides room for movement in either direction.
Conclusion
AVAX price faces a critical juncture as institutional optimism clashes with near-term technical weakness and upcoming token unlock concerns. While the 4.97% decline tests trader resolve, the strong fundamental backdrop from BlackRock and VanEck investments suggests any weakness may prove temporary. Traders should monitor the $20.57 support level closely over the next 48 hours, as a break below could accelerate selling into the token unlock event. Conversely, a reclaim of $23.50 would signal renewed buying interest ahead of the December ETF decision timeline.
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