AVAX Price Surge and Potential Challenges
The Avalanche token, AVAX, has experienced a significant price surge recently, with its value reaching over $39. This upward trend demonstrates the altcoin’s strong performance in recent weeks, as it has increased by approximately 10% in the past week alone.
However, investors are concerned about the sustainability of this rally due to the impending unlocking of a substantial amount of AVAX tokens. The unlocking process will release 9.54 million tokens, worth around $372 million, on February 22.
Potential Impact of Token Unlocking
Token unlocks are common in the cryptocurrency space and can impact the value of the unlocked token. In this case, the release of such a large quantity of AVAX tokens could introduce bearish pressure and potentially halt the recent growth of the Avalanche token.
If these newly unlocked tokens flood the market, it may cause a decrease in AVAX’s price as sellers try to capitalize on their holdings. As a result, sustaining a rally above $40 in the long term may prove challenging for AVAX.
Hot Take: Future Challenges for AVAX
The recent surge in AVAX’s price is undoubtedly positive news for investors. However, with the unlocking of a substantial number of tokens on the horizon, there are potential challenges ahead for the Avalanche token.
The release of 9.54 million AVAX tokens could put bearish pressure on the altcoin’s price if these tokens are sold on the open market. Therefore, it remains to be seen whether AVAX can maintain its upward momentum and surpass the $40 mark in the face of this upcoming supply increase.
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