The recalibration of crypto prices is having severe ramifications for projects, and Avalanche is no exception.
Despite the promise of instantaneous settlement, low trading fees, and scalability, the AVAX token is 90 percent from its November 2021 peaks. Bears seem to be starting, considering how easy it has been for them to drop below immediate support levels.
From the daily chart, sellers are in the driving seat, forcing AVAX roughly 10 percent in the last trading day alone. In a bear breakout formation and apprehensive traders, the coin could post even more losses in the days ahead, reading from the candlestick arrangement high timeframe windows.
AVAX Drop and the UST De-pegging
AVAX losses can be traced to the doldrums associated with Terra and its algorithmic stablecoin, UST. The coin was part of the Luna Foundation Guard (LFG) reserve. In their attempts to bring the UST to parity with the USD, maintaining the peg, they sold all their reserves, including the 1.97 million AVAX they had in their possession. This move, amid a fragile bear market, heaped more pressure on the coin, forcing it lower.
With BTC dumping, AVAX traders seem to be moving to safety, liquidating their assets, and forcing the coin lower. Even so, fundamental traders could anchor their bullish view on the network’s activity, performance versus Ethereum, and scalability, making it a choice for projects.
Avalanche Price Analysis
AVAX is changing hands at around $16, down 90 percent from Q4 2021 peaks, in a bear breakout formation.
At spot rates, sellers are in control. The break below $20 during the weekend had high trading volumes, reflecting sellers’ firm grip. Notably, AVAX prices still trend along the lower BB, signaling high sell momentum. At the same time, the divergence from the middle BB points to increased volatility.
With prices sinking and trajectory clearly defined, AVAX traders may find entries on every attempt higher towards $20 and the middle BB in lower time frames with first targets at $15—flashing with July 2021 highs. Further losses below this mark could accelerate the dump to H2 2021 lows at $10.
Technical charts courtesy of Trading View.
Disclaimer: Opinions expressed are not investment advice. Do your research.
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