The last few hours have been quite fascinating for Avalanche. While large-cap coins like BTC and ETH pumped less than 1%, AVAX continued to see double-digit gains in just 24 hours.
In the first, AVAX also passed the $ 99.9 mark a few hours ago. Even so, it has fallen back to $ 97 at the time of writing. Such fluctuations are very common and it is only a matter of time before the $ 100 mark is broken.
The key question now, however, is: can AVAX hold its high rating over time?
AVAX’s recent surge was lacking in volume. In the past, if AVAX rallies were not accompanied by high volume, they could rarely last long.
According to Santiment, the volume has not approached the billions on October 3rd.
Additionally, the asset’s stock-to-flow ratio is quite low, which means that more new supply is coming to market compared to the total supply. In theory, it would be difficult for an asset with a low S2F to hold its value as more supply decreases scarcity and increases inflation.
Bitcoin’s S2F is valued at 56.1 while its inflation is only 1.78% at the time of writing. Ethereum’s numbers are even better – its S2F is up to 184.37 due to token burning, while its inflation stays below 1% (0.54% to be exact).
Therefore, compared to the leading coins on the market, it is safe to say that AVAX will have a hard time keeping its price above $ 100.
In addition, social sentiment for altcoins – both dominance and volume – has not yet been high. At the time of writing, AVAX only accounts for 1.6% of the crypto-related social circle. The number of mentions is also at an all time low at the time of writing.
In the last few months, AVAX has made great strides in the DeFi area. So far, the ecosystem has facilitated initial DEX offers. In fact, beginners have joined the AVAX ecosystem and the number of daily transactions has hit a new high.
Additionally, Avalanche’s Total Value Locked (TVL) – a technical metric that measures the amount of accumulated assets placed on a given log – increased by inches from Avalanche. The higher the locked value in a given protocol, the better.
At press time, the metric has risen to new ATH levels and is around $ 10.5 billion, higher than the Fantom ($ 5.52 billion) and Tron ($ 6.51 billion). This suggests that people in space have started to prefer the Avalanche Network.
Additionally, AVAX developer activity saw a parabolic rebound this month. Overall, the current status of this indicator assures the community that the future of the Avalanche Protocol is secure.
Given the pace of development and fundamentals, it is therefore safe to say that the long-term outlook for AVAX is pretty good.
AVAX price analysis
- Key Support Level: $ 78
- Key Resistance: $ 100 (ATH), $ 102
AVAX has been on a clear uptrend for some time and today hit a new all-time high, just 10 cents from the $ 100 mark. So far, however, the bulls have not been able to break this important milestone and today’s candle could end on a bullish long wick.
The main resistance is in the $ 100 to $ 102 range. If the bulls do not close above this zone, we can expect a retreat to key support around the $ 78 level.
Despite the new record, according to technical indicators, there are first signs of a weakening of the upward trend:
Volume: The volume is high (bullish) but still lower than the volume recorded in September. Lower volume in an uptrend is a sign that the trend is weakening.
RSI: The RSI has seen a large bearish divergence. Each higher price high is followed by a lower high in the RSI, which runs from August to November, and if that divergence occurs, AVAX could see a sharp correction.
MACD: The MACD on the daily timeframe is bullish at the time of this writing, but similar to the RSI, the MACD histogram is showing signs of bearish divergence. Watch more closely when the MACD crosses a bearish crossover above its moving averages.
The trend for AVAX is currently bullish, but should the support fail, a downtrend could develop quickly in the short term.
Short term price forecast
While the new all-time high is cause for celebration today, the strength this time around is weaker than it was in the past.
This is reason enough for you to be extra careful with daily and weekly candlesticks and price movements. After a major rally, AVAX may need some breathing space and retest the key $ 78 support before attempting to break the $ 100 level.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.