- Avalanche (AVAX) has been surging since Monday and looks poised to hit $50—the token looked set to achieve this milestone last week but lost momentum at $45.
- However, on-chain data has revealed that whale investors have been selling off their holdings after the price hit $40, with $6.8 million worth of AVAX sold in the past week.
After a relatively quiet 11 months this year, Avalanche (AVAX) has woken up from its slumber to become one of the best-performing large-cap cryptocurrencies in the market. In the past two weeks, it has made the biggest gains in the top 20 and looks set to break the $50 resistance. However, is it time to take the profits as whales start disposing of their holdings?
AVAX is changing hands at $42, gaining 3.5% in the past day to push its market cap to $15.4 billion, the ninth-highest in the market ahead of Dogecoin, TRON, and Polkadot after massive gains in the past few weeks. It flipped DOGE a week ago after gaining 44% in a week.
The daily gain comes despite a dip in its trading volume by 20% to $1.16 billion, which was only bettered by seven other cryptos, three of which were stablecoins. These metrics prove that investor interest in the token remains high as we approach the year’s end.
In December, it has been the best performer in the top 20.
The token has had several tailwinds, the most unique of which was a social experiment by the founder Trader Joe. He launched the experiment, which he nicknamed BEEG, by launching an ASC-20 standard inscription, similar to Ordinals on BTC, which caused the gas fees to spike to over $4.
I know I'm probably public enemy no.1 rn (sorry), but got some good news to share:$BEEG minting seems to be speeding up. We're 37% minted in 2h15m and ~4300 holders which is incredible
I was thinking we might take weeks to mint out but looks like we'll get there much sooner… pic.twitter.com/DMZDNB2wDp
— fish 🐟 (@cryptofishx) December 17, 2023
Can Avalanche (AVAX) Maintain its Rally?
Despite its stellar performance, AVAX has some key metrics going against it and indicating the rally might not be sustainable in the long term.
Its relative strength index (RSI) is around 90, indicating that the token has been massively overbought and a correction is on the cards soon. The Bollinger Band indicator supports this, indicating that the price is likely to reverse once it hits the $45 mark.
The biggest pitfall, however, is the whales, which are crypto addresses that hold tokens above a certain threshold. This group has been observed to be selling its tokens and taking profits since AVAX hit $40.
Data by IntoTheBlock indicates that the net flow of the large holders decreased significantly this week amid a 30% price rise. Since December 8, when the price of AVAX hit the $30 mark, these whales have been going slower on their purchasing, indicating that they bought their tokens at much lower prices and are taking profits.
When the price hit $40, the whales dumped a net 156,560 AVAX tokens in just one day, worth $6.588 million. In the past two days, these whales have sold over $7 million worth of the token and look set to sell more, which could turn the momentum bearish.
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