Bitcoin price increase is positive and has opened more room for altcoins, but some are still not meeting expectations. Avalanche (AVAX) experienced an increase of around 15% but still hasn’t broken out of its narrow range. So, how long will this continue? What does the current outlook indicate?
Avalanche (AVAX)
Avalanche‘s price, despite the recent 15% increase, has not yet escaped a 1-month consolidation period. There are many reasons for this, but the rapidly increasing circulating supply is at the forefront. The release of hundreds of millions of dollars worth of new AVAX into the market, no matter how strong the demand, has not yet brought the desired rise in the middle of bull markets.
For example, on May 22, nearly 10 million AVAX, valued at $347 million, will enter circulation. Exactly 4 days later, the lock will be opened at this time. After the lock opening on May 22 (12:00 AM UTC), gradual lock openings will continue.
By the end of August 2024, there will be another similar lock opening. The current circulating supply is 382 million 502 thousand. By the end of 2024, this figure will be 478.8 million. This means that 96 million more AVAX will enter the markets for the rest of the year. This roughly translates to an increase of $3.5 billion in circulating supply. Considering the current market value is $14 billion, this figure is definitely significant.
The sales pressure created by these lock openings, made for strategic partnerships, team, and staking returns, cannot be ignored as it limits the appetite for AVAX.
AVAX Predictions
Looking at the short-term outlook, the price is not escaping the 1-month consolidation period. Investors who have held AVAX for less than 1 year and more than 1 month view price increases as opportunities to take reasonable profits. The $3.5 billion worth of coins yet to be unlocked, as mentioned in the first section, motivates them to buy at lower levels. This group’s proportion is 40%, which is not negligible.
Altcoin tried to break out of the $39 consolidation range ceiling about three times last month. It was unsuccessful and is still finding buyers below this level. If medium and short-term investors can curb their urge to take profits, a new attempt at the $50 level could begin in a scenario where $39 turns into support.
