Avalanche (AVAX) Price Forms a Double Bottom But Is It a Sign That It Could Be Headed for More Upside?

Recent data signals that whale activity around the cryptocurrency was on the rise. AVAX had a $19.69 price at press time which represented a 32.95%

Avalanche's native token, AVAX, has encountered a double bottom, which could indicate potential for further gains. Recently, there has been a surge in whale activity around the cryptocurrency.

At the time of writing, AVAX is trading at $19.69, showing a 32.95% increase from its lowest price point this month. Data from IntoTheBlock reveals that whales have been accumulating AVAX over the past few weeks.

To start the year, whales held 26.53 million AVAX, according to the data. By 19 April, that figure had risen to 38.47 million AVAX. The difference, at present value, is roughly $231.5 million.

The renewed interest from whales offers encouragement that AVAX is still an appealing coin. It may have also contributed to the latest price uptick and helped to prevent further downside for the token.

This recent surge in whale activity may be a response to the latest Avalanche upgrade, dubbed Octane. The upgrade reportedly reduced transaction fees by more than 30 percent and swapping fees by 97 percent.

On-Chain data also shows that short-term traders acquired a significant amount of AVAX and have been taking profits since then, which is evident in their decreasing balances.

Conversely, HODLer and cruiser balances have been increasing since then, which may explain why AVAX price did not experience a massive pullback after its latest rally.

AVAX crypto sell pressure has cooled down, which could pave the way for more upside.

Examining the crypto spot flows suggests that the bears have been pulling back. Spot inflows were as high as $10.63 million on 6 April, but that figure dropped to $1.4 million on 18 April.

The declining spot flows were accompanied by a significant uptick in open interest. The latter was up from $297.44 million on 12 April to $423.55 million as of 20 April.

Spot flows were also back on the positive side, suggesting that investor sentiment was back in favor of the bulls.

While the decreasing sell pressure set the stage for some accumulation and, consequently, some upside, demand remained limited, perhaps because investors remained on the side of caution. However, whale demand suggests that there was optimism about AVAX price prospects moving forward.

The cryptocurrency's MFI confirmed that positive liquidity flow was returning to AVAX price through its latest spike since 7 April.

While liquidity flows have been positive, price movement was rather limited last week. However, the key takeaway was that profit-taking was limited.

Avalanche TVL holds on above $1 billion while DEX volumes cool down.

Total value locked is usually a decent measure of market confidence in a coin. Avalanche TVL managed to stay above $1 billion despite its decline from its December peak above $1.64 billion. However, it was still nowhere near its historical top, during which TVL surged as high as $13.9 billion in 2021.

Avalanche also saw a significant surge in DEX volumes in Q4 2024. DEX volumes surged over $662 million, highlighting how it managed to take advantage of opportunities in the DeFi segment.

DEX volumes have since cooled down in line with the bearish market conditions. It was down to around $84.38 million. Daily transactions and stablecoin marketcap also hovered at significantly lower levels compared to their December and January levels.

Stablecoin marketcap peaked at $2.43 billion in December and was down to $1.73 billion as of 19 April. The latter's transactions clocked in at 211,230 TXs, which is also a significant cool down from over 586,000 transactions recorded on 8 December.

The above Avalanche metrics highlight the impact of the bearish market conditions over the last four months. They also confirmed that network activity maintained healthy levels. Nonetheless, further price appreciation may hinge on a broader crypto market recovery.