Data on the Chain Flashes a Massive Avalanche Warning
As of the end of July, the price of Avalanche (AVAX) was well above $33, indicating a strong performance for the cryptocurrency at that time. However, recent data on the chain is now flashing a massive warning sign for AVAX holders. The price to finance ratio (IOMAP) is a key metric that is supporting these forecasts, showing how many addresses holding AVAX are currently in profit, break-even, or at a loss.
Using this on-chain metric, traders can determine specific price levels at which AVAX is likely to exhibit strong support or resistance. The current data suggests that there are 82,670 addresses that purchased AVAX at an average price of $21.12 and are currently experiencing unrealized losses. On the other hand, there are 70,930 addresses that purchased AVAX at a lower price and are currently in profit. This discrepancy indicates potential selling pressure and resistance for AVAX moving forward.
AVAX Price Prediction: $19 or $17
Looking at recent price trends, AVAX has underperformed compared to the broader altcoin market. Between July 22 and August 6, the cryptocurrency experienced a significant 40% retracement, signaling a bearish trend. Additionally, AVAX is currently trading below the 20-day moving average, indicating further downside potential.
If the current bearish trend continues and buyers fail to defend the coin, AVAX could potentially drop to the $19.56 price level. If this support level fails to hold, the next critical level to watch for would be around $17.03. On the flip side, if buying pressure increases, AVAX could rally to $23.07 and potentially surpass the $24.25 EMA to reach $26.64.
Key Takeaways for AVAX Investors
In conclusion, the data on the chain is signaling a potential avalanche for AVAX, with significant selling pressure and resistance levels ahead. Traders and investors should monitor key price levels closely and be prepared for further downside if buying pressure does not increase.
It is crucial for AVAX holders to stay informed about the latest market trends and news surrounding the cryptocurrency to make informed decisions about their investments. As always, it is essential to exercise caution and conduct thorough research before making any financial decisions in the volatile cryptocurrency market.
