Avalanche (AVAX), the native token of the Avalanche blockchain, has been on a downward trajectory, raising concerns among investors. Over the past week, AVAX has shed 15% of its value, dropping to $24.24 with a market cap of $9.5 billion at the time of writing. This slump follows a broader correction throughout June, with AVAX plummeting 36% and revisiting December 2023 price levels.
Technical Indicators Signal Potential for Further Decline
Technical analysis paints a bearish picture for AVAX. Analyst Crypto Patel identifies a head-and-shoulder pattern on the charts, suggesting a potential continuation of the downtrend. This pattern often precedes a significant price drop, with Patel predicting a further correction of 40-60%, pushing AVAX as low as $19 or even $13.
Patel advises caution for investors looking to enter the market after the recent plunge. He recommends placing strict stop-loss orders to manage risk in case the bearish trend persists.
Whale Activity Fuels Market Jitters
Adding fuel to the fire, significant whale activity has been observed. An entity identified as “0x32…4f30” transferred a massive 1.96 million AVAX coins, worth approximately $54.2 million at current prices, to major crypto exchanges like Binance, Coinbase, and Gate.io. This transfer, potentially signaling an intent to sell, has further pressured the price. The use of cross-chain bridges like THORChain for these transfers suggests a coordinated effort, raising concerns about potential market manipulation.
Avalanche Loses Ground to Competitors
The recent correction has pushed Avalanche’s market valuation below $10 billion. This slump has seen AVAX fall behind other altcoins like Tron (TRX) and Shiba Inu (SHIB) in terms of market cap. Notably, Avalanche has lost nearly $14 billion in value since mid-March, highlighting the severity of the recent decline.
Uncertain Future for Avalanche
Whether AVAX can recover from this downturn remains to be seen. The technical indicators and whale activity paint a concerning picture, while the loss of market dominance adds another layer of complexity. Investors should carefully consider the risks involved before entering the AVAX market at this time.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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