Avalanche (AVAX) has hovered beyond a steady support floor without visible signals for volatile moves. Nevertheless, the narrative might shift as Bitcoin starts to appear bullish. Thus, market participants need to watch the altcoin market as prices might explode soon.
AVAX and Its Upside Potential
Avalanche lost nearly 84% from the $146.75 all-time high. Massive declines within the previous two weeks contributed to the colossal discounts in AVAX price. LUNA and UST crisis started brewing after the FOMC conference in May’s first week. That worsened the feeble market structure, crashing Bitcoin from $31K to $29K and then $25K.
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The sudden drop caused alternative tokens, including AVAX, to suffer escalated plummets. Avalanche plunged by 67%, crashing to $22 from $69 before briefly shattering the barrier at $31.38.
So far, recoveries beyond the market overturned into support, indicating a further potential to the upside. Buyers will encounter resistance at the closest obstacle at $39.92. Reactions at this value area will determine AVAX’s directional bias.
If AVAX flips the area into another support, it will clear the road for a swift 25% uptick towards $52.53. That would translate to a 55% upsurge from Avalanche’s current price, and the area will likely cap more upside for the alt.
Failure to overcome $39.92 will confirm buyers’ weakness or unwillingness to collaborate. That might see Avalanche retesting the $31.38 mark. Sellers flipping the area into resistance will annul the bullish narrative and catalyze a plummet towards $20.80.
On-chain volume adds credence to the weak state of AVAX buyers. A surge in on-chain volume shows investors interacting with the platform, possibly investing in the coin. This metric’s upsurge welcomes a price uptick for an alt. So, some investors use the narrative to join the trend early.
For Avalanche, the on-chain volume faded from the 2.58 billion high to 673 million. The 74% drop indicated waning interest from investors while revealing capital flights. Thus, interested traders should wait for AVAX to overturn the hurdle at $39.93 into support before going long.
As highlighted above, BTC’s price actions are crucial for the token’s directional bias. Assessing broad market sentiment remains essential for profitable activities by AVAX traders.
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