Avalanche’s (AVAX) price has gained 10% in the last 24 hours following its brief drop below $15 on Monday. This development comes after the crypto market experienced a slight relief from the weekend correction.
Despite the rebound, it appears that the coast is not yet clear for AVAX, with key resistance levels likely stopping the increase.
In this analysis, CCN explains why it could be difficult to sustain recent gains in cryptocurrency.
AVAX Bears Remain in Control
One metric that raises concerns about AVAX’s price to sustain its upward momentum is the Bulls and Bears indicator.
This metric tracks the number of addresses responsible for at least 1% of the total trading volume, highlighting significant buy—and—sell activity.
Typically, when bulls outnumber bears, it signals strong buying pressure.
However, data from IntoTheBlock shows that bearish addresses currently dominate. As a result, the selling pressure could hinder AVAX’s chances of staging an extended rally in the short term.
Besides that, the In/Out of Money Around Price (IOMAP) indicator also aligns with the outlook. The IOMAP is a key metric that identifies support and resistance levels by analyzing the volume of unrealized profits and losses.
When a higher volume of tokens is in profit, it signals strong support. On the other hand, when more tokens are in unrealized losses, it signals strong resistance.
According to IntoTheBlock data, the major resistance for AVAX’s price lies around $17.78. At this price level, 155,210 addresses are holding over 14 million tokens at a loss, significantly higher than the volume in profit between $14.49 and $16.99.
Want to add AVALANCHE AVAX to your portfolio? Discover the leading platforms for buying and selling AVALANCHE AVAX on our exchange review page.
As a result, AVAX’s price may face difficulty breaking through the buy wall between $17.78 and $19.62.
AVAX Price Recovery in Jeorpady
From a technical perspective, the Chaikin Money Flow (CMF) has failed to rise above the signal line. The CMF measures the level of accumulation and distribution around a cryptocurrency.
When the CMF rises above the midpoint, it indicates an increase in buying pressure. However, a negative reading indicates a surge in distribution.
As of this writing, the CMF reading stood at -0.02, indicating that selling pressure is dominant. A look at the Moving Average Convergence Divergence (MACD) is also negative, indicating bearish momentum.
Should this trend remain the same, AVAX’s price might retrace to $14.64. As a result, the altcoin has a lower chance of climbing to the 0.786 Fibonacci level.
On the other hand, if the MACD reading turns positive, this trend might change. In that case, AVAX’s price might retest the overhead resistance at $23.47.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Was this Article helpful?
