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The price of Avalanche cryptocurrency experienced a significant drop from its peak on Tuesday, continuing its decline for the second consecutive day. The cryptocurrency fell nearly 4.51%, with the trading price hovering around $51.19.
Moreover, the entire cryptocurrency market has been witnessing a downturn recently, including market leaders Bitcoin and Ethereum. A closer look at Bitcoin’s price performance reveals that it has fallen nearly 15% from its peak over the past five trading days. Ethereum has also seen a decline of nearly 20% in the same period.
Avalanche cryptocurrency has also suffered a steep decline in the past few trading days, with a dramatic 12% drop yesterday. The mid-day price fall of nearly 4.5% suggests that it has joined the downward trend of the cryptocurrency market.
However, there is dynamic support from the 20-day exponential moving average below, which may attempt to prevent further declines. If sellers continue to dominate, the price could fall further.
Avalanche Cryptocurrency: Volatility Rises as Prices Fall
Volume analysis indicates that AVAX cryptocurrency received an inflow of $2.84 billion in trading volume over the past 24 hours, a decrease of 9.62% from the previous day. The inflow has diminished over the past few trading days.
The trading volume to market capitalization ratio for Avalanche stands at 14.71%, indicating significant market volatility. Recent trading days have seen an increase in volatility.
The circulating supply of AVAX tokens is 377.31 million, accounting for 52.4% of the maximum supply. The total supply of AVAX cryptocurrency is valued at $720 million.
Social Dominance and Volume Surge Rapidly
Social dominance and volume are indicators that clearly reflect changes in the popularity and awareness of Avalanche cryptocurrency over time.
The chart shows that social dominance and volume surged in December 2023 and fell in January 2024. However, since February 2024, the trajectory of both social dominance and volume has been on the rise, indicating an increasing acceptance of the cryptocurrency among users.
Overall Sentiment Turns Negative
The sentiment candlestick chart displays a short-term trend shift towards bullish or bearish directions. The chart illustrates changes in the positive, negative, and weighted overall sentiment for AVAX cryptocurrency.
In recent trading days, the overall weighted sentiment for the cryptocurrency has declined. Earlier, the overall sentiment was positive and on an upward trajectory. However, the past few trading days have seen a significant sell-off in the entire cryptocurrency market, including market leaders Bitcoin and Ethereum. The overall sentiment curve has now fallen near the zero line, indicating an imminent shift to a bearish outlook in the short term.
Short-Term Outlook for Avalanche Price
Currently, the short-term trend outlook is neutral to bullish, as long as AVAX cryptocurrency maintains dynamic support above the 20-day and 50-day moving averages. Additionally, the $50 level below may serve as a strong support.
Furthermore, if the price breaks below the recent support level of $50, it could validate the continuation of the correction phase, and the Avalanche price could see a significant drop. On the downside, the $40 and $35 levels may be the next lower targets following a crash.
Conclusion
Avalanche cryptocurrency has fallen nearly 15% from its recent high and is teetering on the edge, joining the short-term downward rebound of the entire cryptocurrency market. The AVAX price has dropped nearly 4.5% mid-day, with the current trading price at $51.19.
On the downside, dynamic support from the 20-day moving average and the $50 level may prevent further declines, as the long-term trend outlook remains bullish. However, if the bulls fail to establish their presence near the dynamic support, the price could plummet to the $40 level.
Technical Levels:
Support levels: $48.4 and $41.6. Resistance levels: $61.5 and $69.9.
Sentiment: Neutral
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