Avalanche (AVAX) Shows Signs of Long-Term Bottom, Price Stability Amid Market Volatility
2min read Avalanche (AVAX) has shown signs of a potential long-term bottom, according to recent technical analysis. The past month's price action indicated that the downtrend was losing momentum, with the bearish trend slowing down. The $15.27 level marked the March low, and the recent sell-off forced Avalanche to fall to $14.66. However, the fixed range volume profile showed that the upper and lower bounds of the value area were at $39.3 and $15.4, respectively, with the Point of Control at $18.7 serving as resistance. This suggests that the $15-$17 range is likely to be a critical demand zone for Avalanche. If the price falls below $14.5, it could signal another leg downward. On the other hand, if avax bulls continue to defend this region, there would be increased potential for recovery.
The slowdown in the bearish momentum came alongside AVAX bouncing between $15 and $23 in the past month. This range could mark the consolidation phase that follows the strong downtrend of the previous three months. The 30-day liquidation map showed that long liquidations outnumbered short liquidations and were positioned closer to the current price. It identified high-leverage liquidation levels at $18.18, $17.76, and $16.74 as short-term targets. A potential dip to these levels to gather liquidity before a price rebound appears likely in the short term. Above $18.24, clusters at $19 and $20 serve as significant magnetic zones, indicating areas to monitor for a bearish reversal.
Additionally, Avalanche has been trading within a narrow 2% range between $18 and $20 this week, indicating a period of stability amidst broader market volatility. This stability comes as global markets grapple with uncertainties, which have historically led to increased volatility in the cryptocurrency space. The fact that AVAX has maintained a relatively steady price range suggests that investors may be viewing it as a more stable asset compared to other cryptocurrencies. The stability of AVAX can be attributed to several factors. Firstly, Avalanche is a layer-1 blockchain that supports smart contracts and decentralized applications (dApps). Its use of the proof-of-stake mechanism allows for fast and low-cost transactions, making it an attractive option for developers and users alike. This technological advantage may be contributing to its resilience in the face of market volatility.
Furthermore, the recent plunge in the MVRV (Market Value to Realized Value) Ratio for Ethereum, another major smart contract platform, could be seen as a positive sign for Avalanche. The MVRV Ratio is a metric used to gauge the market sentiment and potential future price movements of a cryptocurrency. A lower MVRV Ratio often indicates that the asset is undervalued, which could lead to a price rebound in the long term. While this analysis pertains to Ethereum, it may also reflect broader market conditions that could benefit Avalanche.
In conclusion, Avalanche's recent price stability within a narrow range suggests that it may be nearing a long-term bottom. Its technological advantages, coupled with broader market conditions, make it a potentially attractive investment option for those looking to capitalize on the long-term value of the cryptocurrency market. However, it is important to note that market conditions can change rapidly, and investors must temper their expectations and conduct their own research and analysis before making any investment decisions.
