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Amidst Bitcoin’s downturn from $70,000 to $64,000, AVAX has dropped by 28% from June 7, reaching a pivotal support level at $25.
In this analysis, we will cover both the technical and on-chain aspects of Avalanche (AVAX) and provide you with a detailed price prediction.
AVAX Price Prediction and Outlook
Following Bitcoin’s price drop from $70,000 to $64,000, AVAX has experienced a staggering 28% decline from June 7 to the present. This significant drop has pushed AVAX to test a crucial support level at $25.
Additionally, the daily chart’s RSI has reached 28, indicating an oversold environment.
In a previous BeInCrypto Analysis, we predicted that AVAX could fall to $25 in a bearish scenario if Bitcoin’s price continues to decline. To reduce risk exposure, we’ve advised traders to wait for the price to drop below $30 before buying. Suggesting that the ideal buy range would be around $25-$27 for an optimal entry position.
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The price has followed our Avalanche prediction, reaching a local low of $25 today, a level not seen since December 2023. It then bounced back by 6% to $26.50. Confirming our forecast and underscoring the significance of the $25 price level mentioned in our previous analysis.
Currently, the price is exhibiting a bearish scenario as it trades below all key technical analysis indicators on the daily timeframes. It is below the Ichimoku Cloud, the baseline of the cloud, and the exponential moving averages, all of which are strong bearish signals.
Analyzing the Total Addresses Holding AVAX and Profitability
Total Number of Addresses Holding AVAX
Total Addresses with Balance, measures the number of unique addresses on the blockchain that hold some AVAX. Each address represents a user or entity capable of sending, receiving, and holding cryptocurrency, as well as interacting with decentralized applications (dApps) on the network.
The number of addresses increased by 41,316.85 from June 3 to June 10 and 22,060.86 from June 10 to June 17. This data shows steady growth in new addresses, with a larger spike in the first week compared to the second.
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This trend indicates a rising user adoption and network expansion but slower growth in the latter period. So, we should keep an eye on potential changes in user engagement or market sentiment.
Historical Profitability of Addresses Holding AVAX
Analyzing the historical profitability of addresses holding AVAX reveals a shift in participants’ economic sentiment. The Out of the Money area (red) in the chart shows the percentage of AVAX addresses at a loss. The At the Money area (gray) shows the percentage of AVAX addresses at break even. The In the Money area (green) represents addresses in profit.
On May 31, 2024, 36.69% of active addresses were Out Of The Money. This percentage increased to 49.94% by June 17, 2024, reflecting a growing number of participants holding unrealized losses. The proportion of Break-Even addresses (At the Money) started at 5.89% and decreased to 0.78% by June 17, 2024.
This decrease in At the Money addresses suggests that fewer participants are at their cost basis. As more of them are now experiencing losses. Initially, 57.42% of addresses were in profit (In the Money), which decreased to 49.28% by the end of the period.
Additionally, the upward trend in the Out Of The Money category from 36.69% to 49.94% underscores a growing bearish sentiment among holders. The consistent decline in addresses At The Money suggests that the price movements have pushed most participants away from their cost basis and into loss territory.
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This situation is bearish because it could trigger a wave of selling pressure as participants aim to cut their losses. Further driving down the price and increasing market oversupply.
If the price of Avalanche (AVAX) drops below $25, it will likely fall to the strong support level at $20 quickly. This $20 level should serve as important and solid support.
For long-term holders, buying AVAX at these prices presents an excellent opportunity. The price of AVAX is stabilizing around $26, rising 7% from the $25 low, and signaling a potential local bottom.
Indeed, if Bitcoin drops below $65,000, this scenario could be invalidated. Conversely, if Bitcoin rises back to $68,000-$69,000 in the mid-term, AVAX is likely to climb above $30.