Avalanche (AVAX) has faced some recent challenges, with its price dropping over the past week. However, despite the bearish pressure, signs are emerging that the market could soon shift, and traders are watching closely to see if a price rebound is possible.

As of now, AVAX is priced at $18.71, reflecting a 2.13% drop in the last 24 hours and a 10% decline over the past week. This ongoing downtrend has left traders cautious, but the market conditions could change soon based on a few key factors.

Whale Activity Suggests Interest in AVAX

Despite the recent price decline, whale activity has been on the rise. Large investors have been actively accumulating AVAX, with 314 large transactions in the past 24 hours alone. This indicates growing demand from institutional players, which could signal a potential shift in market sentiment. On March 19, there was a 7-day high of 353 large transactions, further showing that significant players are positioning themselves for a potential rebound.

This activity contrasts with the broader market trend, where the AVAX price has been under pressure. The increased buying volume among whales suggests that larger investors might see this price dip as an opportunity, possibly setting the stage for a recovery if the broader market conditions align.

Market Sentiment and Broader Trends

One reason for the current downtrend in AVAX is the recent departure of three board members from the Avalanche Foundation earlier this month, which raised concerns about the project’s future. While the foundation has assured the community that everything remains on track, investor sentiment has been cautious, leading to some selling pressure. The broader cryptocurrency market also plays a role, with Bitcoin (BTC) holding steady above $84,000. If Bitcoin continues its upward momentum, it could help lift AVAX and other altcoins in the process.

Moreover, AVAX’s trading volume currently stands at $213.47M, reflecting a 38.92% decline. A rise in trading volume could indicate renewed interest and buying pressure, which could help reverse the downtrend. Open Interest (OI), a measure of active futures contracts, is also dropping, currently sitting at $341.27 million. If OI starts to rise alongside an increase in price, it would signal that more traders are re-entering the market, potentially fueling a rebound.

Technical Indicators and Resistance Levels

At present, AVAX is at a critical crossroads. Although the bearish trend is prevailing, technical indicators suggest that the altcoin might soon see a recovery if it breaks through key resistance levels. The current support levels are under pressure, and if AVAX fails to hold above these levels, further losses could follow.

However, if AVAX can maintain its position and Bitcoin continues to show strength, a potential rebound could occur. A break above resistance levels would likely indicate the start of an uptrend, with large investors’ actions and market dynamics providing the necessary catalyst for a recovery.

Conclusion

In summary, while AVAX is currently facing a downtrend, the growing interest from whales, along with broader market conditions and key technical indicators, suggests that a rebound is possible. If the momentum shifts and AVAX breaks through resistance levels, a recovery could be on the horizon. However, traders must remain cautious, as failure to hold support could result in further losses. The next few days will be crucial in determining whether AVAX can make a comeback or continue its downward trajectory.