AVAX rises amidst bearish on-chain signals: Here’s a closer look

• AVAX rises by 5%, but is plagued by bearish on-chain signals and a market sentiment split.
• A significant drop in derivatives trading volume suggests reduced market interest or potential consolidation.

Avalanche [AVAX]  has recently displayed bullish momentum. With its price climbing by over 5% in the past day, there is growing speculation about whether AVAX is on the cusp of a massive surge.

Let’s try to find out.

Mixed sentiments from on-chain data

Currently priced at $27.06 with a 1% increase in the last 24 hours and a significant 5% gain previously, AVAX’s market cap stands at around $10.54 billion.

The split among holders making money at the current price is relatively balanced, with 49% in profit. AVAX has seen $461 million worth of transactions greater than $110K.

According to the data provided by IntoTheBlock, sentiment and trading signals are mostly bearish.

This sentiment is underpinned by several bearish on-chain and exchange signals, such as a net negative growth in network transactions and a bearish bid-ask volume imbalance, meaning selling pressure is increasing.

However, the overall sentiment remains mixed.

As seen in the chart above, AVAX’s price is moving below all the averages, suggesting a strong bearish trend in the near term. The RSI sitting at 40 means that the asset is neither overbought nor oversold—neither bullish nor bearish.

The Bollinger Bands show that AVAX has mostly been trading within the bands, indicating stable volatility. The periodic breaks below the lower band suggest that the bears are fully in charge, consistent with the minor downturns observed.

AVAX’s derivatives trading activity plunges

AVAX’s derivatives market doesn’t have it any easier.

Trading volume has decreased significantly by 52.41% to $352.50 million, indicating a reduction in trading activity, which might suggest a decrease in interest or a consolidation phase after recent price movements.

Interestingly, the Binance AVAX/USDT pair shows a higher ratio of long positions (1.7824), meaning that traders are more bullish on this pair.

Moreover, AVAX’s Accumulation/Distribution Line is on a decline.

Read Avalanche’s [AVAX] Price Prediction 2024-25

This trend suggests that there may be a higher level of distribution than accumulation, indicating selling pressure or a lack of new buying interest, which is a bearish signal.

The MACD, a trend-following momentum indicator, shows a bearish crossover (where the MACD line crosses below the signal line), which is typically considered a sell signal. Traders are not bullish on AVAX.