Avalanche (AVAX), once a high-flying altcoin, has recently experienced a significant downturn. After reaching a peak of $55, AVAX has struggled to maintain its upward momentum, leading to a decline to the $40 level. This bearish trend, coupled with a recent bearish crossover, has sparked concerns among investors.
#Avalanche: As bearish crossover emerges, what's next for #AVAX? https://t.co/xpdzpTlNJ1
— AMBCrypto (@CryptoAmb) December 15, 2024
A Bearish Crossover Looms
A bearish crossover on the Stochastic RSI has added fuel to the bearish fire. This technical indicator suggests a shift in market momentum from bullish to bearish. The Simple Moving Average (SMA) has also confirmed this trend, further solidifying the bearish outlook.
Investor Sentiment Wanes
The declining Open Interest, which measures the total number of outstanding contracts, indicates a decrease in investor activity. This suggests that traders are becoming more cautious, potentially leading to further price declines.
Whale Activity Slows Down
Large holders, or whales, have also reduced their activity in the AVAX market. Inflows have significantly decreased, suggesting that whales are either selling their holdings or staying on the sidelines. Additionally, the dominance of short positions in the market further reinforces the bearish sentiment.
What Lies Ahead for AVAX?
Given the current market conditions, AVAX could potentially decline further to the $43 level. However, a strong breakout from the current range could push the price back up to $55. However, with significant resistance levels in place, a sustained recovery may be challenging.
Also Read: Avalanche (AVAX) Surged 90% in November: Bullish Signals Point to $134 and Potential $205 Target
The bearish crossover and declining investor sentiment have painted a bleak picture for AVAX. While a short-term recovery is not entirely ruled out, the overall trend appears to be bearish. Investors should exercise caution and closely monitor market developments to make informed decisions.
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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