AVAX Tests Critical $20 Support After Token Unlock Triggers 4.4% Daily Decline
Luisa Crawford Oct 17, 2025 18:26
AVAX price drops to $20.08 following 1.67M token unlock, testing key support as broader crypto market weakness compounds selling pressure from increased supply.
Quick Take
• AVAX trading at $20.08 (down 4.4% in 24h) • 1.67 million token unlock creates supply pressure amid market downturn • Critical $20 support level being tested with RSI approaching oversold • Following Bitcoin's weakness as risk-off sentiment dominates crypto markets
Market Events Driving Avalanche Price Movement
The primary catalyst behind AVAX price weakness stems from the October 13 token unlock event, which released 1.67 million AVAX tokens worth approximately $35.8 million into circulation. This unlock represents 0.39% of the total circulating supply, creating immediate downward pressure on the token's price action.
The timing of this unlock proved particularly challenging as it coincided with broader crypto market weakness that has persisted through October 14-17. The combination of increased supply hitting the market during a period of reduced demand has accelerated AVAX's decline from recent highs, with the token falling from $22.38 on October 14 to the current $20.08 level.
This supply shock effect is amplified by the current risk-off environment across digital assets, where investors are reducing exposure to altcoins in favor of more defensive positioning. The unlock mechanism, while programmatic and expected, often creates short-term selling pressure as recipients look to realize profits or institutional holders rebalance portfolios.
AVAX Technical Analysis: Testing Critical Support Zone
Price Action Context
AVAX price is currently trading well below all major moving averages, signaling a clear bearish technical structure. The token sits 24.7% below its 20-day SMA at $26.68 and 27.6% below the 50-day SMA at $27.73. However, the current price of $20.08 is holding just above the 200-day SMA at $22.98, which could provide longer-term support if tested.
The 24-hour trading range of $19.03 to $21.27 shows contained volatility despite the negative price action, suggesting potential consolidation around current levels. Volume on Binance spot markets reached $125.87 million, indicating healthy participation during the decline.
Key Technical Indicators
The RSI reading of 30.96 places AVAX in neutral territory but approaching oversold conditions, which historically has provided bounce opportunities for the token. The MACD configuration shows bearish momentum with the main line at -2.27 below the signal line at -1.43, and the histogram at -0.83 confirming continued downside pressure.
Avalanche's position within the Bollinger Bands reveals significant technical stress, with the %B reading of 0.10 indicating the price is trading very close to the lower band at $18.39. This positioning often signals potential for mean reversion back toward the middle band at $26.68.
Critical Price Levels for Avalanche Traders
Immediate Levels (24-48 hours)
• Resistance: $21.92 (7-day SMA acting as dynamic resistance) • Support: $19.03 (24-hour low and psychological $19 level)
Breakout/Breakdown Scenarios
A break below the $19.03 support could trigger accelerated selling toward the lower Bollinger Band at $18.39, with the next major support zone around $16.04 representing the 52-week low. Conversely, a recovery above the 7-day SMA at $21.92 would signal potential for a test of the $23.73 EMA level.
AVAX Correlation Analysis
Bitcoin's concurrent weakness is providing additional headwinds for AVAX price action, as the correlation between major altcoins and BTC remains elevated during market stress periods. The broader cryptocurrency market downturn mentioned in recent events suggests systematic selling rather than AVAX-specific issues.
Traditional market factors appear secondary to crypto-native catalysts currently, though any significant risk-off moves in equity markets could compound the negative sentiment affecting digital assets broadly.
Trading Outlook: Avalanche Near-Term Prospects
Bullish Case
Recovery above $21.92 would indicate the token unlock selling pressure is being absorbed, potentially leading to a test of $23.73 resistance. A broader crypto market recovery could see AVAX benefit from oversold conditions with targets at $26.68 (20-day SMA).
Bearish Case
Failure to hold $19.03 support opens the door for a test of yearly lows around $16.04. Additional token unlocks or continued crypto market weakness could extend the downside pressure beyond current technical levels.
Risk Management
Traders should consider stops below $18.50 to limit exposure to a breakdown scenario. Given the Daily ATR of $2.84, position sizing should account for continued volatility as the market digests the supply increase from the recent unlock event.
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