Avalanche (AVAX) faces significant downward pressure as the network prepares to unlock $35 million worth of tokens on October 24. This development comes amid declining transaction activity and shrinking network fees, compounding bearish sentiment around the token.
Over the past month, AVAX has entered a pronounced bear trend, tumbling nearly 45% from its September peak of $36 to just around $20. This sharp decline places it at its lowest level since early October, reflecting broader concerns about both market dynamics and internal ecosystem performance.
The upcoming token unlock is a critical factor weighing on investor sentiment. A total of 1.67 million AVAX tokens—valued at approximately $35 million—will be released into circulation. This is part of Avalanche’s long-term token distribution schedule, which has already seen around 60% of the total supply unlocked, with the process expected to continue until 2030. Historically, such unlocks tend to exert downward pressure on prices by increasing supply without a corresponding rise in demand.
Concurrently, data from blockchain analytics firm Nansen reveals troubling trends in user engagement. Over the past week, the number of transactions on the Avalanche network dropped by 18%, dipping to 11.1 million. This decline in on-chain activity has had a direct impact on revenue generation, with network fees plummeting 61% in the same period to just $345,000. However, on a monthly basis, fees have risen sharply—up 120% to $2.14 million—indicating some resilience in longer-term metrics.
Avalanche employs a fee-burning mechanism, meaning that all transaction fees are permanently removed from circulation. This deflationary model can potentially support token value over time, especially when network usage is strong. Recent data shows a surge in the burn rate, with over 4.87 million AVAX tokens destroyed to date, marking a symbolic milestone for the platform.
Despite the bearish technical setup, Avalanche is not without bullish catalysts. The platform has established itself as a key player in the stablecoin and real-world asset (RWA) tokenization sectors. Currently, the blockchain hosts over $740 million in tokenized RWAs, placing it among the top five networks in this niche. Institutional interest is growing, with entities like SkyBridge Capital and Grove Finance collectively tokenizing more than $550 million in hedge fund and credit products on Avalanche.
Another notable development is the launch of FRNT, the first U.S. state-issued stablecoin by Wyoming, which was issued on the Avalanche blockchain. This marks a significant shift toward regulatory acceptance and paves the way for increased government usage of blockchain technology for payment infrastructure.
From a technical perspective, the AVAX/USD daily chart shows a clear breakdown in momentum. Following its September 23 high of $36, the price has fallen to as low as $17, a level that aligns with key support zones previously tested in April, June, and October. The token currently trades below both the 50-day and 200-day Weighted Moving Averages (WMAs), signaling weakened bullish control.
If the downtrend continues, Avalanche may soon form a “death cross” pattern—where the short-term moving average crosses below the long-term one—a historically bearish signal that could trigger further declines. If AVAX breaks below the critical $17 support level, the next likely target would be around $15, which would mark a new multi-month low.
Looking beyond price charts and short-term volatility, Avalanche’s long-term outlook remains linked to its ability to attract real-world adoption and developer activity. Its recent advancements in stablecoin infrastructure and RWA tokenization are promising, but sustaining momentum will require continued innovation, strong community engagement, and macroeconomic support for digital assets.
Moreover, the broader crypto market is navigating a complex environment of regulatory scrutiny, fluctuating investor sentiment, and shifting monetary policies. These external factors may further influence AVAX’s performance in the coming weeks.
As token unlocks continue, investors will be closely watching how the Avalanche Foundation manages liquidity and supply expansion. Transparency around token allocation, staking incentives, and ecosystem grants could help mitigate concerns tied to inflationary pressures.
In the medium term, strategic partnerships and integrations may also serve as a buffer against bearish momentum. If Avalanche can secure additional collaborations with financial institutions or government bodies, it could reinforce its legitimacy and utility as a blockchain infrastructure layer.
Finally, with Ethereum gas fees remaining high, Avalanche’s low-cost, high-speed architecture still offers compelling advantages for developers and users seeking scalable alternatives. If the network can capitalize on this edge, it may reclaim upward momentum once current supply concerns subside.
In summary, while the imminent $35 million AVAX unlock and declining network metrics place short-term pressure on the token, Avalanche’s growing role in stablecoin issuance and asset tokenization presents meaningful upside potential for long-term investors.