AVAX price hovered above a stable support level with no signs of a volatile move in sight. However, things could change if Bitcoin’s price starts to look bullish. Therefore, investors should pay close attention to altcoins as they can explode quickly.
Avalanche and its ability to rise
AVAX is down 84% from its all-time high of $146.75. Most of the downturn has happened in the past two weeks or so. After the FOMC meeting in the first week of May, problems started to brew for UST and LUNA. This development eventually exacerbated the already weak market structure and caused the price of Bitcoin to crash from $31,000 to $29,000 and then $25,000.
This sudden downtrend caused altcoins, including AVAX, to suffer a similar fate. For AVAX, it was a 67% downswing, one that pushed it down from $69.46 to $22.43 and briefly shattered the $31.38 barrier.
So far, the recovery above this level has turned into a support level, suggesting further uptrend is likely. The immediate hurdle at $39.92 is where buyers will encounter some resistance from sellers, which will be a determining factor.
If Avalanche manages to turn this level back into a support barrier, it will open the way for a quick 25% build-up to $52.53. In total, this move would represent a 55% increase from its current position and the top for AVAX is likely to be capped.
If it doesn’t go beyond $39.92, it means the buyers are weak and not cooperating. This could trigger a $31.38 retest.
If sellers take control and turn this barrier into a resistance level, it will invalidate the bullish thesis and cause a crash to $20.80.
What does the volume say?
Further supporting the bad state of buyers for AVAX is the on-chain volume. More often than not, a spike in on-chain volume indicates that investors are interacting with the blockchain and likely investing in the token.
In fact, a rise in this metric is often followed by a spike in the price of AVAX. It can sometimes allow traders to catch a trend early. For AVAX, the on-chain volume has dried up from a peak of 2.58 billion to 673 million. This 74% drop in on-chain volume is indicative of declining investor interest and reveals a capital flight.
Therefore, investors will have to wait for a jump from the $39.92 hurdle to a support floor to position themselves for a long time.
This post $52 or $20 – Which Level Will AVAX See First?
was published first on https://ambcrypto.com/52-or-20-which-level-will-avax-see-first/