AVAX Price at a Critical Juncture Amid Bearish Signals and Strong On-Chain Activity

The price of Avalanche’s native token, AVAX, is currently at a pivotal point, with technical indicators pointing toward bearish momentum despite a surge in on-chain activity. The cryptocurrency has faced significant price fluctuations in recent weeks, leaving many investors closely watching for its next move.

AVAX Price Action: From Reversal to Potential Breakdown

Following a steep downtrend that bottomed out in mid-March, AVAX saw a reversal driven by a double-bottom pattern. This recovery led to a period of consolidation within an ascending channel, supported by bullish momentum and a rising Relative Strength Index (RSI). However, recent price movements indicate a shift in sentiment.

Currently, AVAX appears to be forming a descending triangle pattern, a bearish technical formation. The token has also fallen below the lower boundary of the ascending channel, signaling a potential change in market structure from bullish consolidation to emerging bearish pressure. This shift is raising concerns among traders and investors.

Key Support Levels to Watch

AVAX is now trading near a critical zone of horizontal support, ranging between $17.80 and $18.50. This area also coincides with the lower boundary of the descending triangle and the recently broken ascending channel support. This confluence of factors makes it a crucial decision point for the market.

If AVAX breaks below this support zone, it could confirm the descending triangle breakdown, potentially opening the door for a decline toward the $15.00 level. Conversely, the RSI nearing oversold territory suggests that a bullish recovery could still be on the table, depending on how the price behaves in the coming days.

Strong On-Chain Activity Fails to Lift Market Sentiment

Despite the bearish technical signals, Avalanche’s on-chain activity has demonstrated impressive growth. A surge in transactions, largely driven by the platform arena.trade, has pushed network metrics to new highs. Arena.trade allows users to mint tradeable ERC-404-style tokens directly from X (formerly Twitter) posts using a bonding-curve mechanism, contributing to a significant uptick in Avalanche’s usage.

Notably, the 7-day moving average of daily transactions has exceeded 1 million, marking its highest level in over a year. However, this increase in transactions has not been accompanied by a rise in active addresses, suggesting that a smaller group of users is responsible for driving most of the activity.

What to Expect Next

As AVAX hovers near this critical support zone, the next few daily candles will be crucial in determining its short-term trajectory. Traders should monitor key technical levels and indicators, such as the RSI and descending triangle pattern, to gauge whether the token will resume its bearish trend or stage a recovery.

For those new to cryptocurrency investing, consider these tips:

  • Understand technical analysis: Learn the basics of chart patterns and indicators like RSI to make informed decisions.
  • Set stop-loss orders: Protect your investments by setting limits on potential losses.
  • Monitor on-chain activity: Strong network metrics can provide insights into a cryptocurrency’s overall health.
  • Stay updated: Regularly follow market news and developments to adapt your strategies as needed.

As the AVAX market evolves, staying informed and prepared will be key to navigating its potential price movements effectively.

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