Avalanche (AVAX), the native token of the popular smart contracts platform, is experiencing a price surge, currently trading at $28.44. This uptick aligns with a recent analysis that predicted a bounce for the cryptocurrency. But what’s driving this growth, and can we expect it to continue?
Unlike other altcoins that have seen temporary price spikes. AVAX’s rise appears more sustainable. This is supported by compelling on-chain data from Santiment and IntoTheBlock.
Social volume, a key metric indicating investor sentiment, has reached new highs for Avalanche since June 27th. This organic growth, unlike the FOMO-driven spikes seen with other tokens (like Solana’s recent ETF filing frenzy), suggests a genuine increase in confidence towards AVAX. If this trend continues, a significant price increase beyond the current 6.32% could be in the cards. Historically, such surges in social volume have preceded price peaks for AVAX, with the token reaching $36.80 on June 6th.
Support Levels Bolster Bullish Outlook
The In/Out of Money Around Price (IOMAP) indicator from IntoTheBlock further reinforces the potential for AVAX’s ascent. This metric reveals significant buying activity around the current price point ($28.54). With a large number of addresses accumulating AVAX at this level, a strong support base exists to prevent a dramatic price drop. Additionally, those who bought at lower price points ($27.29) are now “in the money,” further incentivizing them to hold and potentially push the price upwards.
Fibonacci Retracement and Buying Pressure Align
Technical analysis also paints a bullish picture for AVAX. The Fibonacci Retracement indicator suggests the token is approaching a resistance level ($28.54) that could be a stepping stone for further growth. Furthermore, the Chaikin Money Flow (CMF) indicator, which measures buying and selling pressure, has shifted into positive territory, indicating an influx of buying activity. This confluence of on-chain data and technical analysis suggests that AVAX might break through the immediate resistance and reach a first target of $31.39.
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However, it’s crucial to acknowledge potential risks. If buying pressure wanes and the CMF climbs too high (indicating overbought territory), a correction could see AVAX drop to $25.59 or even $23.92 in a severe bearish scenario.
The Verdict: Bullish Signs Abound
While the future remains uncertain, the current on-chain data and technical analysis suggest a bullish outlook for Avalanche. Organic social volume, strong support levels, and positive buying pressure create a compelling case for continued price appreciation. However, staying informed about market sentiment and potential headwinds is crucial for any investor considering AVAX.
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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