Why Avalanche’s latest milestone may not help AVAX hop out of its slumber
- Avalanche’s daily active addresses extend the growth streak to a six-month high.
- AVAX retests key support level but bulls are shy to come out.
April is approaching its conclusion and so far it has been a good month for Avalanche. The network has achieved robust growth, especially in terms of daily active users. But will that growth have a positive impact on AVAX’s price action?
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Avalanche’s latest daily active users data revealed a strong surge in the last two weeks. Daily active users recently soared to a 6 month high. The development underscores healthy network activity which is in line with the positive developments that Avalanche has achieved so far this year.
Daily $AVAX Users have just reached a 6 month high at around 82,000 per day. 🚀 pic.twitter.com/LgiYazUGGf
— Lark Davis (@TheCryptoLark) April 24, 2023
Why AVAX might be on the verge of a potential pivot
AVAX’s price action experienced a mid-week cliff dive that resulted in a 22% pullback to its $16.76 press time price. It gave up all the gains that it had achieved in the first half of April due to this bearish price action.
Despite the downside, AVAX witnessed some signs that showed that the bears were slowing down. The timing of this observation was particularly noteworthy because AVAX was trading in a wedge pattern underpinned by descending resistance and ascending support. The pullback recently triggered a support retest.
AVAX’s RSI was also seen hovering just below the 50% level while the MFI confirmed the sell pressure slowdown. Although the support retest and other price chart observations suggested that a pivot was on the way, on-chain volumes indicated that there was low confidence among investors.
The weighted sentiment also declined significantly in the last few days, in tandem with the price decline. This could be taken as confirmation of low confidence in the bulls. AVAX’s on-chain volume also dropped to its lowest weekly level on 23 April.
There was a slight volume increase in the last 24 hours which suggested that there was some buying pressure. This may have neutralized some of the buying pressure but was not enough to trigger a significant pivot.
AVAX’s market cap gained roughly $200 million at the time of writing. It also lost a substantial amount of that gained market cap, indicating a tug-of-war between the bulls and the bears.
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In summary, AVAX’s price action demonstrates uncertainty and low confidence in the bulls. This meant that there stood the possibility that AVAX can still extend its downside and break through the current support level if the bulls fail to rise to the occasion.