AVAX’s tough year – What needs to change for Avalanche?

by
    AVAX has underperformed most of its competitors in terms of YTD return on interest
    Sentiment and social volume around Avalanche fell as prices surged

Avalanche (AVAX) has struggled this year compared to other altcoins. With a YTD loss of 21.52%, AVAX holders have suffered significant losses. At press time, AVAX was trading at $33.99, but it’s been declining since the beginning of April. The price has consistently hit lower lows and lower highs, indicating a bearish trend (Chart 1). The RSI also followed suit, signaling a lack of bullish momentum.

As an analyst, I’ve observed that Avalanche [AVAX] has faced significant challenges since the start of the year compared to other altcoins in the market. To be more specific, AVAX has experienced a decline of 21.52% Year-to-Date (YTD), leading to substantial losses for its holders.

How is AVAX doing?

Currently, AVAX is being bought and sold at $33.99 in the markets. Yet, over the past month, AVAX’s price has taken a downturn. The charts illustrate that the cryptocurrency reached successive lower highs and lower lows during this timeframe – an indication of a bearish trend for AVAX. Furthermore, the RSI value for AVAX has also decreased.

Read more$70 million in 24 hours: Can Ethereum crack $4,000 thanks to whales?

Over the past few days, there has been a substantial decrease in bullish energy surrounding Avalanche. Moreover, the Chaikin Money Flow (CMF), which mirrors the RSI’s trend, moved downwards – indicating that more capital is exiting the AVAX market than entering it.

In simpler terms, a significant surge in buying power is required for AVAX‘s price to rise again and reverse its current downtrend. It must surmount the resistance at $50.78 on the charts to accomplish this change in trend direction.

The influence of AVAX‘s social media presence on its price trend is significant. Recently, the social buzz surrounding AVAX has stayed steady. Yet, there’s been a noticeable increase in negative sentiment towards AVAX compared to positive sentiment during this timeframe. This indicates that negative comments about AVAX have been more prevalent than positive ones as of now.

Should AVAX fail to win back user approval on social media, there’s a good chance its value may decrease even more in the future.

State of the network

Read moreBitcoin halving could be a ‘sell-the-news’ event, at least for a few months

The use of Avalanche protocol has been waning lately, as evidenced by a decrease in its user base and transaction activity. According to AMBCrypto’s investigation into active addresses on the Avalanche network, daily users of the platform have dropped noticeably. Moreover, the number of transactions taking place on the network has also decreased.

As an analyst, I’ve observed a decrease in engagement towards Avalanche, particularly within the Decentralized Finance (DeFi) sector. This was evident in the declining Total Value Locked (TVL) and Decentralized Exchange (DEX) trading volumes. These figures suggest that user interest in Avalanche has waned on various fronts.

Realistic or not, here’s AVAX market cap in BTC’s terms

For a trend reversal, the popularity around both AVAX and the protocol would need to improve.

Read More

Read morePEPE flips Optimism: Can OP emerge from the memecoin mania?

2024-04-28 02:15