Avalanche (AVAX) Struggles to Break Resistance, Can It Recover to the $50 Mark?

Avalanche (AVAX) has been experiencing a downward trend in its price movement, currently at $42.15. Over the last 24 hours, the price has decreased by 3.85%

Avalanche (AVAX) has been following a downward trend in its price movement, currently trading at $42.15. Over the last 24 hours, the price has decreased by 3.85%, signaling a shift in market sentiment. As resistance levels are being tested and trading volume drops significantly, many are left wondering whether AVAX can recover to the $50 mark or if further declines are on the horizon.

Key Resistance and Support Levels to Watch

At present, AVAX is encountering a key resistance level around $43.81. Despite attempts to break this threshold, the price encountered substantial selling pressure, causing the downtrend to continue.

This resistance point is crucial for any potential bullish reversal. Hence, for AVAX to show a more sustained upward movement, it must break through this level, opening the path for higher prices.

On the other hand, the support level around $42.00 has become a focal point for traders. This price level is often seen as psychologically significant due to its rounded nature. If AVAX fails to hold at $42.00, the next major support zone could emerge near $40.00, marking a critical threshold for investors to watch. A breakdown below $42.00 may accelerate the downtrend, with bearish pressure pushing the price toward lower support levels.

The 24-hour trading volume of AVAX has decreased substantially, with its Volume/Market Cap ratio sitting at 6.59%. This suggests a reduction in market activity during the ongoing downtrend, potentially signaling diminished investor interest.

Lower volume often indicates that traders are being cautious, waiting for clearer signals before making significant moves. Thus, AVAX may need a surge in trading activity to regain momentum.

Despite these challenges, Avalanche’s long-term potential remains intact. However, the current market cap and Fully Diluted Valuation (FDV) show that investors are still being cautious. This reflects the broader market sentiment, where caution is prevailing, and speculative investments are being approached with greater scrutiny.

Short-Term Technical Indicators

In terms of technical indicators, AVAX’s 1-hour RSI reads 42.85, suggesting that the asset is slightly oversold but not in extreme conditions. This could indicate a potential for a short-term rebound, though the move may not be significant unless further buying pressure emerges.

Additionally, the 1-hour MACD trading below the signal line suggests that downward momentum persists in the short run, keeping the price under pressure.

The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.