Avalanche (AVAX) Price Likely to Continue Upswing, Key Indicators Show

By admin On Июн 28, 2024

Avalance (AVAX), the native of the layer-1 blockchain for smart contracts, currently trades at $28.44. This price increase aligns with BeInCrypto’s previous deep-dive, which mentioned that the cryptocurrency was in line for a bounce.

In today’s analysis, backed by compelling analysis, we unlock well-grounded data and explain why AVAX prices will continue to climb.

Demand for Avalanche Not Caused by FOMO

Avalanche is not the only altcoin that experienced a bounce in the last 24 hours. Many others in the top 20 per market capitalization did the same.

However, not all cryptocurrencies will be able to sustain the price increase. But AVAX is not one of them. On-chain data provided by Santiment and IntoTheBlock give reasons for this prediction.

Firstly, we considered analyzing social volume. According to Santiment, Avalanche’s social volume has reached new heights since June 27 and remains at a good height metric as of this time of writing.

Social dominance measures how high low search for a cryptocurrency is. Typically, a surge in arbitrary search for an asset happens when a major development occurs. For example, Solana (SOL) experienced a hike in the metric.

However, it was fueled by the ETF filing development, indicating that participants who bought it did so due to FOMO. As a short form for Fear of Missing Out, the terminology means that the positive development triggered the demand for SOL and price increase.

Avalanche Social Volume. Source: Santiment

In AVAX’s case, there is nothing like that. Therefore, the increase in social volume seems organic, reflecting a sharp increase in confidence. If the reading continues to increase, AVAX may evade correction. Instead, it may experience a notable price growth than the 6.32% registered in the last 24 hours.

Historical data also supports the move, as a significant spike in the metric caused the token to reach $36.80 on June 6.

Support Appears, Ready to Back the Breakout

Like the social volume, the In/Out of Money Around Price Indicator (IOMAP) supports a higher value for AVAX in the short term. IOMAP measures the price ranges at which currency holders purchased their tokens.

With the metric, traders can spot support or resistance areas. The larger the number of addresses accumulating at a point, the more it can support or act as resistance.

The IOMAP shows that 4,100 addresses bought 2.62 million AVAX at an average price of $28.54. Meanwhile, 53,540 addresses purchased 1.21 million tokens at a weighted price of $27.29.

Avalanche IOMAP. Source: IntoTheBlock

While those who purchased at $28.54 are out of money, their opposite numbers are in the number. Therefore, it is likely that those in the money support AVAX’s uptrend, which could help the cryptocurrency break through the resistance at $28.54.

AVAX Price Prediction: Buying Pressure Keeps It Going

Interestingly, the AVAX/USD daily chart shares a similar outlook to the on-chain analysis above. Evidence is reflected in the Fibonacci Retracement indicator, which tells whether a cryptocurrency will continue its existing trend or reverse.

It identifies price benchmarks to reach or where it will likely reverse. At press time, AVAX is seen approaching the $28.54 resistance, which is where the 0.238 Fib level stands. Furthermore, the Chaikin Money Flow (CMF) has also left negative territory.

The CMF measures money flow. In conjunction with other indicators, it tells if a trend will continue or not using the level of buying or selling pressure. Thus, the rise to 0.04 means spot buying of the Avalanche token is present.

Avalanche Daily Analysis. Source: TradingView

If this continues, the cryptocurrency’s price may hit a first target of $31.39. Should bulls succeed in breaching any potential overhead resistance, AVAX can approach $36.01.

However, this prediction may be invalidated if demand for the token falls. The CMF is another factor that could draw down AVAX.

If the CMF reaches 0.20, the cryptocurrency will be overbought. If this happens, the price may fall to $25.59. In a highly bearish situation, it will decline to $23.92.

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