AVAX rises amidst bearish on-chain signals: Here’s a closer look

AVAX

As an experienced analyst, I see the recent price surge of AVAX as a potential sign of market interest or even a trend reversal. However, the mixed sentiments from on-chain data and the significant drop in derivatives trading volume raise some concerns.

As a researcher studying the cryptocurrency market, I’ve noticed that Avalanche [AVAX] has shown impressive bullish signs lately. In just the previous day, its price spiked by more than 5%. This development has sparked excitement and speculation among investors, raising questions about whether AVAX is on the verge of experiencing a significant price surge.

Let’s try to find out.

Mixed sentiments from on-chain data

As a crypto investor, I’d express it this way: The current price of AVAX is at $27.06, marking a 1% rise in the last 24 hours and an impressive 5% growth previously. With this progress, AVAX’s market capitalization now hovers around $10.54 billion.

AVAX rises amidst bearish on-chain signals: Here’s a closer look

Approximately half of those earning money from AVAX currently are in a profitable position. The platform has recorded transactions totaling $461 million, where the value exceeded $110,000 each.

According to the data provided by IntoTheBlock, sentiment and trading signals are mostly bearish.

As an analyst, I’ve observed some concerning trends that suggest a bearish outlook for this market. Specifically, the number of transactions on the network has been decreasing, indicating a net negative growth. Additionally, the bid-ask volume imbalance has become more skewed towards selling pressure. These signals collectively indicate that bears are gaining strength in the market.

However, the overall sentiment remains mixed.

AVAX rises amidst bearish on-chain signals: Here’s a closer look

Looking at the graph, AVAX‘s value appears to be dipping below all its moving averages, indicating a possible bearish market development in the upcoming days. Meanwhile, the Relative Strength Index (RSI) currently hovers around 40, implying that the asset is neither excessively bought nor sold, hence exhibiting neutral characteristics.

The Bollinger Bands indicate that AVAX‘s price movements have mainly stayed inside the bands, reflecting a steady volatility pattern. However, frequent dips beneath the lower band hint at bearish control, aligning with the minor price declines observed.

AVAX’s derivatives trading activity plunges

AVAX’s derivatives market doesn’t have it any easier.

The trading volume has dropped by a substantial 52.41%, down to $352.50 million. This decline could signify lessened trading engagement, potentially indicating decreased investor interest or a pause in market activity following notable price fluctuations.

It’s intriguing to note that the proportion of long positions in the Binance AVAX/USDT market is notably larger (with a ratio of 1.7824), indicating a stronger bullish sentiment among traders towards this particular pair.

Moreover, AVAX’s Accumulation/Distribution Line is on a decline.

Read Avalanche’s [AVAX] Price Prediction 2024-25

As a crypto investor, I’ve noticed a concerning trend. The number of coins being sold in the market seems to outpace the number being bought, suggesting a greater distribution than accumulation. This could be a sign of selling pressure or waning new buyer interest, both of which are bearish indicators for the cryptocurrency market.

In simpler terms, when the MACD, a popular trend-following tool among traders, exhibits a bearish crossover – meaning the MACD line falls beneath the signal line – this event is often interpreted as a warning sign for AVAX investors. It suggests that traders are currently pessimistic about AVAX’s price direction.

2024-06-20 09:11

Mixed sentiments from on-chain data

AVAX’s derivatives trading activity plunges

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