Avalanche (AVAX) has been on a downward trajectory for the past two months, currently trading at $27. With key support levels eroded, whale investors are feeling the strain.
Despite the prevailing challenges, hope lingers for AVAX to stage a comeback in the near future.
Pressure Mounting on Avalanche
The market sentiment surrounding AVAX is taking a hit as whale outflows hit a three-month peak. A sharp 23% decline in price over the week has prompted significant holders to offload their positions.
A massive 10.08 million AVAX worth over $272 million was liquidated in a single day, indicating a lack of faith in a swift recovery as whales opt for damage control rather than hanging on.
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This phenomenon underscores the mounting doubt among influential players. The surge in whale selling has underscored a bearish stance, impacting AVAX's price trajectory. Major holders are likely prioritizing capital protection in light of market volatility, reflecting caution among the wider investor community.
AVAX Whale Outflows. Source: IntoTheBlock
Overall momentum for AVAX seems poised on the brink of oversaturation in its bearish phase. The Relative Strength Index (RSI) is tiptoeing perilously close to breaching the 30.0 threshold, hinting at AVAX edging towards oversold territory. Historically, crossing into oversold realms has often marked the onset of a price reversal as bearish momentum peters out.
Close proximity to oversold territory could pave the way for a potential rebound. The allure of bargain prices may entice more market participants to dip in, possibly buttressing AVAX and fueling a recovery. However, these dynamics are tentative, hinging on steadier market conditions for a substantive turnaround.
AVAX RSI. Source: TradingView
AVAX Price Forecast: A Retrospective Approach
Having slipped below the $31 support level last weekend, AVAX currently rests at $27. Enduring a bearish spell for two months, the token faces a dearth of buying impetus intensifying the downward pressure. Yet, the $27 mark holds pivotal, offering a glimmer of recovery opportunity.
While further declines seem remote given the saturated bearish environment, AVAX risks sliding to $22 if investor sentiments sour, triggering additional sell-offs. Short-term bearish undertones might thicken, necessitating the altcoin to reclaim key support levels to avert deeper losses.
AVAX Price Analysis. Source: TradingView
On the flip side, reclaiming the $27 support could steer AVAX towards $31 once more. A breach beyond this frontier would debunk pessimism, implying a potential resurgence. Surmounting the $31 obstacle might help AVAX recoup recent setbacks and pave the way for a broader rally.