Avalanche’s native cryptocurrency, AVAX, has encountered a significant downturn, with its price plummeting by 15% in the past week alone. The latest 24-hour period saw an additional 4.54% correction, dropping the price to $24.69. This recent decline has dragged the market cap to $9.7 billion.
Over the past month, AVAX has corrected by a staggering 36%, hitting levels not seen since December 2023. Renowned crypto analyst Patel provides a detailed technical perspective on this bearish trend, emphasizing the potential for further declines. Patel’s analysis centers around the formation of a head and shoulders pattern on the AVAX chart, a classic indicator of a bearish reversal.
The head-and-shoulders pattern is characterized by three peaks, with the highest peak (the head) flanked by two lower peaks (the shoulders). This pattern signals an impending decline when the price breaks below the neckline support level. According to Patel, AVAX has already breached this critical support, indicating a shift from bullish to bearish market sentiment.
Patel’s analysis suggests a potential 40% to 60% decline from current levels. He has identified target prices at $19 and $13, corresponding to key support levels. The first support, at $19, might attract some buying interest, potentially slowing the decline. However, if this level fails to hold, Patel warns of a deeper drop to $13, indicating a continued bearish trend.
AVAX Investors Urged to Remain Cautious
Investors are advised to exercise caution, particularly those considering long positions. Patel urges traders to use strict stop losses to mitigate potential losses. The recent price decline can be partly attributed to significant whale activity, with 1.96 million AVAX (valued at $54.2 million) being transferred to major exchanges, increasing selling pressure.
The recent price drop has pushed AVAX’s market valuation below $10 billion, causing it to fall behind other altcoins such as Tron (TRX) and Shiba Inu (SHIB). Since mid-March, Avalanche has lost nearly $14 billion in value, underscoring the severity of its current bearish phase.
Further compounding the negative sentiment is the current price of $24.69, below both the 50-period moving average and the 200-period exponential moving average. This alignment forms a death cross, where the shorter-term average dips below the longer-term average, reinforcing the bearish trend and indicating a shift in momentum.
Avalanche’s AVAX is facing a significant downturn, with technical indicators pointing towards further declines. Patel’s analysis, highlighting the head and shoulders pattern and the breakdown of key support levels, suggests investors should brace for continued bearish momentum. With heightened trading activity and strong whale movements contributing to the pressure, the path ahead for AVAX appears challenging.
Related Readings | Toncoin (TON) Skyrockets to $8.2 All-Time High, Eyes $10.50 Target Amidst Bullish Signals