Avax Rises Amid Bearish On-Chain Indicators: A Closer Look
Contributor
- AVAX rises 5% but is plagued by pessimistic on-chain signals and divided market sentiment.
- A significant drop in derivatives trading volume suggests reduced market interest or possible consolidation.
Avalanche [AVAX] has been showing bullish momentum lately. With the price up over 5% in the last 24 hours, there is increasing speculation if AVAX is on the verge of a massive surge.
Let’s try to find out.
Mixed sentiments from on-chain data
At a current price of $27.06 with a 1% increase in the last 24 hours and a significant 5% gain in the past, AVAX’s market cap is around $10.54 billion.
Source: IntoTheBlock.
The split between holders making money is pretty even at the current price, with 49% of holders in profit. AVAX recorded $461 million worth of transactions above $110,000.
Data from IntoTheBlock shows that sentiment and trading signals are predominantly bearish. This sentiment is supported by several bearish on-chain signals and exchange signals, including a net negative growth in network transactions, a bearish imbalance between bid and ask volume, and an increase in selling pressure. The overall sentiment is mixed.
TradingView
The chart above shows that AVAX is currently trading below the averages. This suggests a strong downtrend for the near future. The RSI at 40 indicates that the asset is neither bullish nor negative. Bollinger Bands
show that AVAX is predominantly trading within the bands. This indicates stable volatility. The periodic breaks below the lower band suggest that the bears have taken full control, as evidenced by the minor dips. AVAX derivatives trading activity plummets
The AVAX derivatives market is having a rough time.
Trading volume has dropped 52.41% to $352.50 million, indicating a drop in activity. This could indicate a drop in interest or a consolidation phase following recent price changes. Source: Coinglass.
It is interesting to note that the Binance AVAX/USDT pairs have a higher ratio (1.7824) of long positions, indicating that traders are more optimistic about this pair.
In addition, AVAX’s accumulation/distribution line is declining. Read Avalanches [AVAX] price prediction for 2024-25.
The trend shows that there is more distribution than accumulation. This could indicate selling pressure or lack of buying interest, which would be a bearish sign.
TradingView
MACD, a momentum indicator that follows trends, has a bearish crossover (where the MACD crosses below the signal), which can be a sell signal. AVAX is not a bullish stock.
