Avalanche’s price decline is likely to persist as a Death Cross occurs on the 12-hour chart, with indicators signaling increasing bearish momentum. Investor sentiment remains predominantly pessimistic, contributing to the ongoing downward trend.
Avalanche (AVAX) price is expected to continue declining, unlike some other altcoins that are showing signs of recovery. Adding to the challenge for AVAX is the lack of optimism among its investors, who are not anticipating a rally in the near future.
Avalanche (AVAX) Faces Challenges Amidst Market Uncertainty
At the time of writing, Avalanche’s price is hovering below $40, following recent corrections and a slight uptick in the last few days. While some hope for further price increases exists in the market, AVAX is not sharing in this optimism.
AVAX is currently experiencing its first Death Cross in almost a year. This occurs when the short-term 50-day Exponential Moving Average (EMA) crosses below the long-term 200-day EMA, indicating a potential downward trend. Traders often interpret this as a bearish signal, prompting concerns among investors.
Avalanche Death Cross. Source: TradingView
The weighted sentiment surrounding AVAX has been steadily decreasing over the past month, reaching a two-month low due to the recent price drop. The lack of bullishness among AVAX holders further exacerbates the downward pressure on the price.
Avalanche Investors’ Sentiment. Source: Santiment
Avalanche (AVAX) Price Analysis: Potential Support Test and Bearish Outlook
Avalanche’s current price of $37 suggests a potential retreat to test the $33 support level, which held strong during the recent market correction. If this support is breached, combined with bearish market signals, AVAX could see a further decline to $29.
The Average Directional Index (ADX) indicates a bearish outlook for AVAX. With the indicator surpassing the 25.0 threshold, signaling a strengthening downtrend, AVAX may face further downward pressure, potentially reaching a low of $27.
AVAX/USDT 12-hour chart. Source: TradingView
Despite the bearish sentiment, AVAX could recover if broader market conditions turn bullish. If the downtrend shifts to an uptrend and AVAX breaches the $44 resistance level, it could invalidate the bearish scenario and pave the way for further upward movement.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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