In recent trading sessions, Avalanche (AVAX) has seen its market value drop significantly, with its price falling to a six-month low.
Over the past month, AVAX has plummeted 25%, with a decline of 14.7% in the past week and a further decline of 0.3% in the past 24 hours, bringing its current trading price to $24.23. This decline marks a stark turnaround for an asset that has otherwise shown strong performance in recent months.
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Extra correction of 60% for AVAX, but why?
The ongoing downward trend has not gone unnoticed in the crypto community. Technical analysis reveals worrying signs, with the AVAX chart showing potential for further declines.
Crypto analyst Patel, citing current chart patterns, speculates that AVAX could soon experience an additional 40% to 60% drop in value. The formation of a head-and-shoulders pattern, a classic technical indicator of future price declines, is the driving force behind this bearish outlook.
Patel pointed out the critical nature of the head and shoulders pattern forming on the AVAX chart, noting that the neckline support has already been broken. This break signals a bearish continuation, with Patel predicting a potential decline to $19 and possibly even $13.
📉 AVAX/USDT Chart Analysis:$AVAX forms a head and shoulders pattern. The NECK LINE support has been broken, indicating a bearish trend.
A downward movement of 40%-60% is expected. Targets: $19 and $13.
I’m not saying don’t open a long scalp, but use strict stop-loss. Act wisely!#Crypto… pic.twitter.com/FFetHS2GZc
— Crypto Patel (@CryptoPatel) June 23, 2024
Given these predictions, Patel advises traders and investors to exercise caution, especially those considering opening long positions. He emphasizes the importance of implementing strict stop-loss measures to manage the risks associated with expected volatility.
External influences and optimistic counterpoints
Compounding AVAX’s market problems is the activity of major holders moving large amounts of AVAX to major exchanges.
Prominent on-chain researcher ZachXBT recently did just that linked the continued decline in the value of AVAX until significant transactions by a specific entity identified as ‘0x32…4f30.’
This entity reportedly transferred approximately 1.96 million AVAX, worth $54.2 million, to major exchanges including Coinbase, Binance and Gate, and also facilitated transfers through THORChain.
These types of large-scale moves usually indicate bearish sentiment among major investors, potentially leading to further declines if the trend continues.
Despite the prevailing downturn in AVAX’s performance, some analysts remain optimistic about the broader altcoin market. Analyst Captain Faibik suggests that the current correction period could be an excellent investment opportunity for long-term investors.
According to Faibik, the altcoin sector has shown resilience and growth in recent months and is only undergoing necessary corrections after significant gains.
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He predicts that the second half of the year could witness a robust recovery, advising investors to “buy the dips” in anticipation of a bullish rebound in the third and fourth quarters.
Q3 and Q4 will be EPIC for the Altcoins..!!
I understand that this period is very challenging for Altcoin holders as altcoins have fallen by 40-50%.
However, let’s not forget that we have made significant gains in the last 7-8 months (since October 2023).
From October 2023… pic.twitter.com/w5tterrE8O
— Captain Faibik (@CryptoFaibik) June 23, 2024
Featured image created with DALL-E, Chart from TradingView