- Avalanche has lost half its value since hitting a two-year high in mid-March and now trades at $34, but the large holders are staying patient, and this calm is transmitting to the rest of the market.
- However, AVAX recorded its first Death Cross in a year when its 50-day EMA crossed below the 200-day EMA, which usually signals an oncoming bear market.
The crypto market pullback in the past two weeks was more severe for some coins than others; Avalanche fell squarely under the worst hit. AVAX shed over half its value after hitting a two-year high just two weeks prior, and while it has reversed the downtrend, technical indicators signal a potential bear market in the short term.
At press time, AVAX trades at $34.40, trading sideways over the past day, but shedding over 27% in the past week where it hit a low of $29.83, its lowest price since January.
Despite the dip, data from IntoTheBlock shows that over 57% of AVAX owners are still in profit. This number is significantly lower than for most meme coins; as CNF reported yesterday, over 83% of Dogecoin owners are still in the money, with Pepe at 69% and Floki at 83%.
Just over 6% of the Avalanche owners are at the money at its current price, meaning they purchased the coin at around the price it’s trading. With the token trading sideways since Monday, it’s likely this group is what’s offering support for AVAX.
What’s Next for Avalanche (AVAX)?
Data from IntoTheBlock shows that most metrics are neutral for Avalanche at its current price, explaining its sideways movement. Transactions, while lower than they have been since the year started, remain relatively unchanged this week. The platform further shows that most of the selling pressure has been coming from the liquidation of long AVAX positions in the derivatives market. On average, long positions have seen much more liquidations since last week than short positions.
Analysts noted that the downturn in AVAX price, which started in mid-March, found support at the 0.618 Fibonacci retracement, but its wave-like drop suggests that this was the first wave and that while correction and a bounceback may be seen in the short term, the coin will continue to drop.
Avalanche’s woes are compounded by the Death Cross. This is when the 50-day exponential moving average crosses below the 200-day EMA. This crossing in the trading world signals an oncoming long-term bear market, rendering further support to the wave drop theory.
Other indicators are bearish too; the Average Directional Index, for instance, has been trending lower since the drop in March, indicating that AVAX holders are no longer bullish and that bears could take control of the market.
But while the price dips, the Avalanche ecosystem continues to grow with platforms like Folks Finance and Homium launching new products on the network recently.
