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Key Takeaways:
- AVAX rebounded 9.26% after falling 26% in two weeks, signaling potential recovery.
- On-chain activity rose by over 200%, though technical indicators remain bearish.
- Strong selling pressure persists with 66% of holders at a loss, limiting upside potential.
Avalanche (AVAX) has shown signs of life after a sharp 26% price drop from June 11 to June 24. On Monday, the altcoin surged by 9.26%, hinting at a possible reversal. While the broader market remains cautious, a spike in on-chain activity and sustained support at key levels offers some hope for AVAX bulls.
Smart Money Holds as Retail Sells
Recent on-chain data indicates that smart money investors are holding onto their AVAX positions despite the sharp dip. In contrast, retail investors appear to be taking profits and shifting toward short positions in the derivatives market.
This divergence suggests that while speculative sentiment is leaning bearish, long-term confidence among institutional holders remains steady—a potential bullish sign if the market begins to rotate back into altcoins.
On-Chain Activity Spikes by 204%
One of the most encouraging developments is the surge in on-chain activity. The 7-day active address count has increased by 204%, signaling renewed interest in Avalanche’s network. Though this uptick hasn’t reached April’s highs, it is a sign that user engagement is returning.
If this trend continues, it could boost demand for AVAX tokens and reinforce the case for a price recovery.
Technical Levels to Watch: $16 Support and $19.5 Resistance
Avalanche is currently trading within a key range between $16 and $22.9, with $19.5 as the mid-range resistance. After successfully defending the $16 support level—previously tested in March and April—AVAX is once again attempting to push toward $19.5.
However, momentum indicators remain bearish. The Awesome Oscillator shows continued negative pressure, and the On-Balance Volume (OBV) is still below May’s lows, suggesting that sellers currently dominate the market.
If daily trading volumes stay low as AVAX approaches $19.5, a rejection could follow.
Despite the recent rally, AVAX remains 66.3% below its December 2024 high of $54. According to IntoTheBlock’s Global In/Out of the Money metric, nearly 66% of holders are currently at a loss. Another 27% are at break-even levels, increasing the likelihood of profit-taking on any short-term bounce.
This heavy overhead supply could hinder a sustained breakout unless broader altcoin sentiment improves significantly.
While Avalanche’s recent price rally and surge in activity are positive signals, the technical and on-chain data suggest caution. Bears still have momentum, and major resistance levels lie ahead. Until Bitcoin dominance weakens and capital rotates into altcoins, AVAX holders should temper expectations.
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
Also Read: Avalanche (AVAX) Rebounds 2.6% Amid Mixed Market Signals
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
