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AVAX Loses 29% in a Week: Could These Factors Trigger a Price Reversal?
In the past seven days, Avalanche’s native cryptocurrency, AVAX, has experienced a significant downturn of approximately 29%. Despite this bearish trend, market indicators suggest that the tide might be about to turn. This article explores various factors that could potentially trigger a price reversal.
One of the most crucial metrics is the surge in active addresses and new addresses on the Avalanche network. Data from IntoTheBlock reveals that Active Addresses (AA) have increased by 44.5% over the past week, indicating a significant rise in market participation and interest. This growth trend is further solidified by the whopping 142.9% jump in New Addresses (NA). This simultaneous surge in both AA and NA suggests growing adoption of AVAX, possibly driven by new entrants finding the asset appealing.
Additionally, large holders, also known as whales, appear to be accumulating significant amounts of AVAX. Over the past week, addresses holding between $1 million and $10 million worth of AVAX experienced a 24.08% increase in their balances, with even larger categories witnessing growth trends of 20.13% and 23.56%. This accumulation by whales typically signals a healthy buying trend, as these influential market players tend to align their sentiment with the overall market’s trajectory.
Furthermore, the available supply of AVAX is gradually decreasing due to exchange net outflows dropping significantly in the past day alone, accounting for $9.61 million worth of withdrawals. Additionally, the Open Interest Weighted Funding Rate has returned to positive territory, indicating that sophisticated traders are positioning themselves for a potential rally.
With these factors combined, it’s possible that market sentiment is about to shift towards a more optimistic outlook. If this scenario plays out, AVAX could be on the cusp of recovering from its recent decline and potentially experience a substantial price surge.
Source: ambcrypto.com
