AVAX Coin Price Soars After Token Unlock Event

Bittime - Avalanche coin (AVAX), which is the 14th largest cryptocurrency, saw its price surge for the sixth consecutive day following a significant token unlock event. 

On August 21, the Avalanche token price reached a high of $23.25, the highest level since August 3 and 32% higher than the August low.

Impact of Token Unlock on AVAX Price

The AVAX price increase comes a day after the Avalanche network unlocked 9.5 million AVAX tokens worth more than $202 million. The next token unlock is scheduled for November 18 this year. 

Avalanche holders are expected to experience more unlocks in the coming years, considering only 64% of the total tokens have been unlocked. More than 255 million tokens will be unlocked until August 2029.

Token unlocks often have a negative impact on current holders because they increase the number of coins available on the market. Additionally, unlocking tokens can impact staking returns as some of these tokens flow into the staking pool. 

Data from StakingRewards shows that AVAX staking yields have declined in recent weeks and are near their lowest level in months, falling to 7.93% on August 21 from 7.97% on July 21.

Read also: Cara Membeli Aave (AAVE)

Staking Volume and Changes

AVAX intraday volume also increased after the token unlock on August 20, rising to over 309 million, the highest point since August 7. 

This suggests that some investors may exit their stakes before unlocking the tokens to take advantage of a potential price increase.

However, despite AVAX's price increases, the token has faced immense pressure this year. AVAX has fallen more than 64% from its March high and formed a death cross and head-and-shoulders pattern in June, which often signals the potential for further declines.

Source: TradingView

Competition in the DeFi Market and DEX Volumes

Avalanche also experienced a decline in market share in the Decentralized Finance (DeFi) sector. 

Data from DefiLlama shows that Avalanche's total value locked (TVL) has fallen to $882 million, making it the ninth largest chain in the industry. 

New networks like Base and Arbitrum have surpassed Avalanche, with assets of $1.49 billion and $2.68 billion, respectively. 

Additionally, Avalanche's weekly decentralized exchange (DEX) volume stood at $421 million, while Arbitrum and Base had $3.7 billion and $3.18 billion, respectively.

One reason for this decline may be the unpopularity of the Avalanche memecoin compared to Solana. 

While memecoin tokens like Dogwifhat and Bonk on Solana are gaining significant market share, memecoins on Avalanche like Coq Inu, Kimbo, and Gecko Inu have not gained the same popularity.

Conclusion

The AVAX price spike after the token unlock event shows that despite the challenges and pressure in the market, Avalanche was still able to attract attention and experience price increases. 

However, the challenges of new networks and memecoin's greater popularity on other platforms indicate the need for a more adaptive strategy to maintain its position in the highly competitive crypto market.

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You can buy and sell crypto assets in an easy and safe way via Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. 

Learn How to Buy Crypto on Bittime.

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