Avalanche’s native token, AVAX, has experienced a dramatic downturn, shedding 29.12% of its value over the past week. In the last 24 hours alone, it plummeted by 14.05%, leaving investors concerned about its future. However, there are emerging signs that a bullish reversal could be on the horizon.
Recent data reveals a significant uptick in several key address metrics, pointing to growing market interest in AVAX. Notably, the number of Active Addresses (AA) has surged by 44.50% over the past week, indicating increased transaction activity among existing participants. Concurrently, New Addresses (NA) have surged by 142.90%, suggesting a wave of new investors entering the market and finding AVAX appealing.
This combination of heightened activity from both existing and new market players is a bullish signal. Increased participation typically indicates stronger market interest, which could potentially reverse the recent bearish trend.
One of the most compelling indicators of a potential market turnaround is the behavior of large holders, commonly referred to as whales. According to AMBCrypto, whale activity is on the rise, with significant acquisitions of AVAX occurring across various address categories.
In the past seven days, addresses holding between $1 million and $10 million worth of AVAX have increased by 24.08%. Similarly, those holding between $100,000 and $1 million saw a 20.13% rise, while addresses with balances between $10,000 and $100,000 grew by 23.56%. This pattern of accumulation by large holders suggests a bullish outlook, as these key players are often seen as market trendsetters.
Another crucial factor pointing to a possible price rebound is the decreasing supply of AVAX available in the market. Exchange net outflows have seen a significant drop, indicating that more AVAX is being withdrawn from exchanges than deposited.
In the last 24 hours, $9.61 million worth of AVAX was withdrawn from exchanges, contributing to a weekly net outflow of $69.21 million—the highest since April 4, 2022. This declining supply could create upward pressure on the price, especially if demand continues to rise.
Adding to the optimism, the Open Interest Weighted Funding Rate has turned positive. This metric reflects the sentiment of sophisticated traders, who are now positioning for a potential rally. A positive funding rate often signals that traders expect higher prices in the near future.
While the recent performance of AVAX has been disheartening for investors, the surge in active addresses, intensified whale activity, and declining supply present a compelling case for a potential price reversal. If market sentiment continues to shift towards a more bullish outlook, AVAX could experience a substantial recovery, overcoming the losses incurred over the past week.
Investors should keep a close eye on these developments. The alignment of these factors could set the stage for a new market phase, potentially driving AVAX’s price higher from its current levels. As always, it’s important to stay informed and consider all market signals before making investment decisions.
The recent decline in AVAX’s price has been sharp, but emerging data suggests a potential turnaround. With increased market participation, significant whale activity, and a declining supply, the conditions are ripe for a bullish reversal. Investors and traders should monitor these key indicators closely, as they could signal a shift in market momentum that may lead to a substantial price recovery.
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