Avalanche’s daily active addresses extend its growth streak to a six-month high. AVAX is retesting key support level, but bulls are shy about coming out.
April is coming to an end and so far it has been a good month for Avalanche. The network has experienced strong growth, especially in terms of daily active users. But will that growth have a positive effect on AVAX’s price action?
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Avalanche’s latest daily active user data revealed a strong increase over the past two weeks. Daily active users recently rose to a 6-month high. The development underlines healthy network activity that is in line with the positive developments Avalanche has achieved so far this year.
— Lark Davis (@TheCryptoLark) April 24, 2023
Why AVAX is about to become a potential hub
AVAX’s price action experienced a cliff-dive mid-week that resulted in a 22% drop to the price of $16.76 at the time of writing. It gave up all the gains it made in the first half of April because of this bearish price action.
Despite the downside, AVAX witnessed some signs of the bears slowing down. The timing of this observation was particularly noteworthy as AVAX was trading in a wedge pattern supported by falling resistance and rising support. The pullback has recently led to a retest of support.
AVAX’s RSI also hovered just below the 50% level, while the MFI confirmed the slowdown in selling pressure. While the support retest and other price chart observations suggested a pivot was imminent, on-chain volumes indicated low investor confidence.
Weighted sentiment also fell significantly in recent days along with the price drop. This could be taken as confirmation of the low confidence in the bulls. AVAX’s on-chain volume also fell to its lowest weekly level on April 23.
There was a slight increase in volume in the last 24 hours, suggesting some buying pressure. This may have neutralized some of the buying pressure, but was not enough to cause a significant spillover.
AVAX’s market cap gained around $200 million at the time of writing. It also lost a significant chunk of that market cap gain, suggesting a tug-of-war between the bulls and bears.
Realistic or not, here is Avalanche’s market cap in terms of BTC
In summary, AVAX’s price action shows uncertainty and little confidence in the bulls. This meant there was a possibility that AVAX could still extend its downtrend and break the current support level if the bulls fail to seize the opportunity.
This post Why Avalanche’s latest milestone may not wake AVAX
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