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The selling pressure on AVAX saw the altcoin dip below the $37.5 support level where earlier, buyers attempted to find some price stability. The break of the support level could see AVAX experience more selling pressure in the short to medium-term.
The selling pressure on AVAX could also be connected to the unlocking of 9.54 million vested tokens worth $365 million. This token unlock will increase the circulating supply by 2.59%. Typically, unlock events lead to sharp price drops, if the increase in the token’s supply outweighs current demand for the token.
As such, short traders could position themselves for some short term profit moves.
Avalanche - Layer One Blockchain for DApps
Avalanche is a layer one blockchain for decentralized applications. It is one of Ethereum’s main rivals, as it looks to be the most popular blockchain for smart contract deployment.
Avalanche’s unique architecture allows it to deliver faster transactions of up to 6,500 transactions per second without compromising scalability. Avalanche achieves this using a combination of three individual blockchains: the X-Chain, C-Chain and P-Chain.
Avalanche also offers interoperability features through bridges with popular Ethereum-based projects such as SushiSwap and TrueUSD integrated on Avalanche.
Sellers Look to Extend Advantage
The descent of the Relative Strength Index (RSI) to the oversold level highlighted the bearish dominance on the four-hour timeframe. This bearish trend was reflected in an outflow of capital from AVAX, as marked by the Chaikin Money Flow’s (CMF) negative reading.
Consequently, intra-day traders can ride the bearish momentum by going short at $36.6 with a target of $33 for 10% returns. These gains could further be extended to 20%, if price gets to $30.
Trade Idea:
Entry - $36.6 (CMP)
Potential Target - $33
Stop loss - $39
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.
