- AVAX declined by 8.3% over the past month.
- Avalanche MVRV score of 0.82 suggested that the altcoin is currently undervalued.
As a seasoned analyst with a penchant for deciphering market patterns and trends, I find myself intrigued by the current state of Avalanche (AVAX). Over the past month, AVAX has taken a bearish dive, which is quite unusual given the general upward trajectory we’ve seen in the crypto market. However, it’s important to remember that every downturn presents an opportunity for savvy investors like myself.
Over the past three days, the crypto market has seen impressive gains, with BTC reaching $73,500.
Although certain alternative coins (altcoins) have experienced substantial growth, Avalanche [AVAX] hasn’t followed suit and maintained a prolonged downtrend for the month, failing to show any signs of green.
At the time of writing, AVAX was trading at $26. This marked a 2.04% decline over the past day.
Furthermore, there’s been a weekly and monthly drop for this altcoin, with a decrease of 4.07% and 8.3%, respectively.
As expected, the current market conditions have left analysts deliberating over AVAX’s trajectory.
Furthermore, Burak Kesmeci, an analyst from Cryptoquant, proposed that Avalanche may be underestimated based on its MVRV rating.
Is Avalanche undervalued?
According to Kesmeci’s assessment, it appears that the MVRV score of Avalanche has been on an upward trend during the last three months, peaking at a level of 0.82.
Based on his statements, when Multi-Version Realized Value (MVRV) reaches this particular point, it generally indicates that the altcoin could be undervalued. Previously, higher MVRV values for Avalanche (AVAX) have often been followed by increases in its price trends.
For example, in the 2021 bull rally, AVAX surged from a low of $5 to reach an ATH of $146.
During this period, the MVRV experienced an exponential uptrend, rising from a low of 0.64 to 1.27.
On the other hand, the upward trend might lead AVAX into an overheated market. To be precise, past trends suggest that AVAX’s value becomes overheated when it surpasses the 1.11 point mark.
This implies that the AVAX MVRV score must remain above 1 and not above 1.11.
Examining AVAX reveals that it presented potential sales openings following the prior bull market surge at approximately 1.11 units.
To achieve its inherent worth during this period, the AVAX market price needs to increase from its current level of 0.82 points up to 1.11 points.
What do AVAX’s charts say?
According to Kesmeci’s analysis, the present level of network activity and market factors seem to indicate that Avalanche (AVAX) could potentially be significantly underpriced.
The massive transaction volume of Avalanche has significantly increased, climbing up from a minimum of 1.87 million to a high of 6.71 million.
When there’s a significant number of substantial transactions taking place, it suggests that ‘whales’, major holders, and institutional investors might be amassing Avalanche.
If these entities are amassing in doves (a term often used to denote a group of doves), it suggests that they consider the current prices as underestimated and the market may not have fully appreciated its true worth.
As a crypto investor, I’ve been keeping a close eye on Avalanche, and it’s exciting to see its growth. The number of addresses has consistently increased from 9 million to 9.13 million, indicating more users are joining the network.
As the number of addresses increases, the prices are dropping, which suggests a disparity between transactional activity on the blockchain and the market’s perceived worth.
The increasing trend of this occurrence is supported by the growth in daily active addresses. These addresses have climbed up from approximately 60,000 to 86,330.
This implies that the market fundamentals are strong, only the price that has yet to be realized.
In simpler terms, it appears that Avalanche is significantly underpriced based on market indicators. If the MVRV (Market Value to Realized Value) ratio maintains its upward trend as observed over the past few months, AVAX could potentially surge to approximately $30.8 within a short period.
Consequently, if the current bearish sentiment holds, Avalanche could decline to $24.
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2024-10-31 15:04