Avalanche (AVAX) has experienced a significant decline, dropping 13.49% this week to $20.07, thereby breaking February’s low and approaching the critical support level at $15.28. The recent downturn follows a 6.82% drop in Total Value Locked (TVL) in DeFi and a notable net outflow of $2.47 million on May 31, indicating a shift towards a more risk-averse market environment. Adding to the bearish sentiment is the delay of the SEC's decision regarding Grayscale’s AVAX ETF until July 15, which has notably impacted market confidence. This delay follows VanEck's launch of a specialized institutional fund for Avalanche, but surprisingly, it contributed to rising concerns rather than alleviating them.
With AVAX slipping below its short-term support levels, the daily chart reveals a breakdown from a descending triangle pattern, with ongoing bearish trends confirmed by increased selling volume. As the price struggles to reclaim the $21 support, it is now expected to face challenges should it breach $19.50, which would see it targeting $15.28 as the next substantial support level.
Momentum indicators further confirm the bearish outlook, with RSI signaling selling pressure at 39.79. Additionally, the MACD shows further divergence between its lines, emphasizing the downside momentum. The bearish environment is underscored by on-chain metrics, as Avalanche’s DeFi TVL has contracted sharply, suggesting a pattern of capital outflow and weakened user engagement. Currently, over 90% of AVAX holders are facing losses, contributing to the prevailing risk-off sentiment in the market.
Given these developments, the outlook remains cautious. With market conditions appearing unfavorable for recovery, unless significant buying interest emerges, AVAX might continue on this downward trajectory. Investors should closely monitor the $19.50 support level; a breakdown here could lead to further declines toward the March support at $15.28.
With AVAX slipping below its short-term support levels, the daily chart reveals a breakdown from a descending triangle pattern, with ongoing bearish trends confirmed by increased selling volume. As the price struggles to reclaim the $21 support, it is now expected to face challenges should it breach $19.50, which would see it targeting $15.28 as the next substantial support level.
Momentum indicators further confirm the bearish outlook, with RSI signaling selling pressure at 39.79. Additionally, the MACD shows further divergence between its lines, emphasizing the downside momentum. The bearish environment is underscored by on-chain metrics, as Avalanche’s DeFi TVL has contracted sharply, suggesting a pattern of capital outflow and weakened user engagement. Currently, over 90% of AVAX holders are facing losses, contributing to the prevailing risk-off sentiment in the market.
Given these developments, the outlook remains cautious. With market conditions appearing unfavorable for recovery, unless significant buying interest emerges, AVAX might continue on this downward trajectory. Investors should closely monitor the $19.50 support level; a breakdown here could lead to further declines toward the March support at $15.28.
