AVAX Crypto Down 66%: Should You Seize the Opportunity? Analysis for July 18, 2024

After peaking around $65, Avalanche has suffered a decline of over 66%. Let’s take a look at the future outlook for AVAX.

Avalanche (AVAX) Price Status

After hitting a low of $8.6, Avalanche began a bullish rally that saw it gain 484% in three months. It was when it hit $50 that this rally faded. It wasn’t until buyers returned to $27 that the crypto regained strength in late January 2024. Two months later, Avalanche had a 142% performance and hit a new high of $65. Unfortunately, it was at this price level that Avalanche’s price took a major turn. Indeed, the crypto attracted selling interest that formed a bearish trend that took its price down to $22. This decline was fueled by an overall decline in the crypto market and a declining interest in the Avalanche ecosystem.

At the time of writing, Avalanche's price is trading just below $28. Avalanche's latest fluctuations thus demonstrate a bullish correction on the crypto. This has allowed it to re-enter the $27 support and to remain above the value zone identified just below $26. Although we can imagine the continuation of this rise, Avalanche's short-term trend remains bearish. On the medium-long term side of Avax, it seems that it remains bullish. Nevertheless, it is increasingly worrying, as evidenced by the 50 and 200-day moving averages, both above the price of the crypto and both oriented downwards. Unsurprisingly, on the momentum side of Avalanche, we can see that it has decreased significantly, as evidenced by its price and its oscillators.

The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Now a trainer at Family Tradinga community of thousands of self-employed traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and friendly atmosphere.

Zoom on derivatives (AVAXUSDT)

The open interest of perpetual contracts on Avax seems to have followed the trajectory of the price of its underlying. This shows an increase in speculator activity on Avalanche, mainly buying. However, the funding rate oscillating between positive and negative shows investor uncertainty about the future of Avalanche's price. On the liquidation side, they do not seem significant, although we can note a majority of liquidations of long positions.

The three-month liquidation heatmap for AVAX/USDT reveals three significant liquidation zones on either side of Avalanche’s price. Above this, we see the $30-$31.6 zone. Further up, the $37-$38.5 zone is also apparent. Below the current price, we see the $24-$25.5 zone. As the price approaches these levels, it could trigger a massive order trigger, increasing the risk of a period of heightened volatility for the crypto. These zones are therefore a crucial point of interest for investors.

Assumptions for the Avalanche (AVAX) course

• If Avalanche price holds above $25, we could anticipate a bullish continuation causing a break of $30. The next resistance to consider would then be around $35-$40. If the bullish movement continues, this could suggest reaching $50. At this point, this would represent an increase of over 80%.

• If Avalanche fails to hold above $25, we could see a return to around $22 or even $21. The next support to consider, if the bearish movement continues, would be around $19. Further down, we can note the support at $16. At this point, this would represent a decline of around 42%.

Conclusion

Avalanche has experienced a period of strong growth followed by a significant drop, impacted by market factors and waning interest. Currently, although the crypto has shown signs of recovery, its short-term trend remains bearish, with medium-long term indicators raising concerns. As such, it will be crucial to closely observe the price reaction at different key levels to confirm or deny current assumptions. It is also important to remain vigilant against potential market “fake outs” and “squeezes” in each scenario. Finally, let us remember that these analyses are based solely on technical criteria and that the price of cryptocurrencies can also evolve rapidly depending on other more fundamental factors.