Analysis of Market Trends: Avalanche (AVAX) Encounters Bearish Movement, Future Outlook Uncertain
Following a period of consistent upward movement culminating in a recent peak of $55, Avalanche [AVAX] is now grappling with maintaining its upward trajectory.
Consequently, the digital asset has tumbled to reach a low of $40. Throughout the last fortnight, AVAX has been trading within a consolidation range spanning from $47 to $55.
Presently, Avalanche is being exchanged at $49.49, translating to a 5.13% drop in daily trading charts. Equally, the cryptocurrency has experienced a 2.93% decline in its weekly charts.
Prior to this dip, Avalanche had been progressively climbing, recording a 55.26% surge in value over the preceding month.
The current state of the market prompts uncertainties regarding the future price movements of Avalanche.
Interpreting the Bearish Crossover in AVAX’s Performance
An analysis by CryptoCrypto indicates that AVAX is encountering significant downward pressure alongside an upsurge in selling activities at the time of writing. The bullish momentum of the cryptocurrency is gradually fading as bears strive to dominate the market.
This downward trend has been affirmed by a bearish crossover on Stoch RSI within the last 24 hours. The crossover point of 30.09 indicates a brief spell of bearish momentum.
It signifies a transition in market sentiment from optimism to pessimism, hinting at the likelihood of sellers gaining supremacy.
This transformation is further highlighted by the Simple Moving Average (SMA) flipping over the price, indicating a bearish momentum. Consequent to this development, the market trend might be transitioning into a corrective phase.
Further scrutiny reveals a decline in Avalanche’s Open Interest per Exchange from $219.5 million to $178.4 million in the past week.
A drop in Open Interest mirrors investor sentiments as they opt to close their existing positions while potential entrants remain hesitant to venture into the market.
Moreover, a more pronounced bearish sentiment is observed among AVAX whales, with a marked decrease in large holders inflow from 8.55 million to 2.12 million.
This sharp decline indicates a reduced capital influx from whales, implying their reluctance to invest in the cryptocurrency.
Conclusively, market participants taking short positions have dominated the scene on daily charts. As per the long/short ratio, those holding short positions constitute 51.96% of the total positions.
Given the prevalence of short positions among investors, it suggests that a majority are wagering on price reductions.
Summarily, Avalanche is presently grappling with short-term bearish sentiments, as evidenced by the occurrence of a bearish crossover.
The prevailing market conditions hint at a potential continuation of this trend, which could potentially drive AVAX down to $43.
Subsequently, a breakout from the current consolidation range might see Avalanche recapture $55, a threshold it has unsuccessfully breached in recent weeks.