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The Avalanche (AVAX) cryptocurrency, which currently ranks 11th on CoinMarketCap, has experienced a notable downturn with a 17.72% decline over the past 30 days. Despite this downward trend, the price of AVAX stands at $46.57 today, reflecting a slight increase of 0.26% in the last 24 hours based on a trading volume of $356,212,743.
Technical analysis of AVAX's price chart indicates cautious sentiment among traders, as the cryptocurrency is trading below its 50-day moving average. This is often considered a bearish signal, suggesting potential further declines if not stabilized. However, AVAX remains above critical support levels, which could serve as a foundation for consolidation and potentially an uptick in price shortly.
The AVAX/USD price analysis reveals the market appears to be grappling with bearish pressure as indicated by recent price action. The cryptocurrency has been trading in a range-bound manner, with the latest candlestick marking a price of $46.57.
The Relative Strength Index (RSI) is currently positioned at 45.42, edging closer to the lower bound of 30, which traditionally signifies an oversold market condition. However, remaining above this threshold, the RSI indicates that while selling pressure is present, a turnaround may still be possible if bullish momentum builds up.
Moving Average Convergence Divergence (MACD), another momentum tracker is currently situated below the signal line, with a reading of -0.55 for MACD and -0.42 for the signal line. This positioning suggests that the market is currently experiencing bearish momentum, which traders often consider a sell signal. However, the histogram value at -0.29 is relatively close to the zero line, indicating that the bearish momentum is not overwhelmingly strong.
Fibonacci retracement levels, drawn from recent highs and lows, reveal critical support and resistance levels that traders are likely watching. The most immediate support level is visible at the price of $44.00, a level that may hold significance if the bearish trend continues. On the flip side, resistance is found at $47.96, a price point that could serve as a hurdle for any short-term bullish movement. Surpassing this level could signal a change in market sentiment, potentially initiating a bullish trend reversal.
During the past 4-hours, AVAX/USD fluctuated between $46.82 as a high and $46.65 as a low, indicating a relatively tight trading range. This suggests a degree of uncertainty among traders, with neither bulls nor bears able to establish clear control over the market direction.
As it stands, AVAX/USD faces a crucial junction, with the next move likely being dictated by the interplay between prevailing technical indicators and emerging market forces.
The Total Value Locked (TVL) in Avalanche's ecosystem has reached a five-month high at $1.164 billion, according to data from DeFiLlama. This increase in TVL is a critical metric reflecting user trust and the amount of capital flowing into Avalanche's DeFi protocols. An escalating TVL usually precedes a rise in bullish sentiment, hinting at a potentially increasing demand for AVAX.
Avalanche Total Value Locked. Source: Defilama
On-chain data, specifically the Global In/Out of the Money (GIOM), shows a majority of AVAX holders are currently profiting at the existing price levels, which may reduce panic selling and stabilize the market. A push past the $48.33 resistance could transition a significant number of holders from loss to profit, bolstering market morale.
AVAX Average Price Cost. Source: IntoTheBlock
Nevertheless, there exists a significant resistance zone starting at $48.33. A move toward the $50 mark could shift a substantial segment of currently 'out of the money' holders back to profitability, potentially strengthening market confidence and supporting upward price movements.
The upcoming Bitcoin halving presents a significant uncertainty that could impact the broader cryptocurrency market, including AVAX. If the market reacts negatively, there is a potential for AVAX to drop to its next critical support level at $39, a 15% decrease from current prices. This would challenge the optimistic forecasts surrounding Avalanche and could influence investor sentiment negatively.
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Disclaimer: Analytics Insight does not provide financial advice or guidance. Also note that the cryptocurrencies mentioned/listed on the website could potentially be scams, i.e. designed to induce you to invest financial resources that may be lost forever and not be recoverable once investments are made. You are responsible for conducting your own research (DYOR) before making any investments. Read more here.
