Avalanche’s native token, AVAX, has experienced a significant decrease in value, losing 29.12% over the past week. In the last 24 hours alone, it dropped by 14.05%, causing concern among investors about its future. However, there are indications that a bullish reversal may be on the horizon.
Surge in Active Addresses and New Market Entrants
Recent data shows a notable increase in several key address metrics, indicating growing market interest in AVAX. Particularly, the number of Active Addresses (AA) has surged by 44.50% in the past week, suggesting increased transaction activity among existing participants. At the same time, New Addresses (NA) have increased by 142.90%, indicating a wave of new investors entering the market and finding AVAX attractive.
This combination of increased activity from both existing and new market players is a positive signal. Greater participation usually indicates stronger market interest, which could potentially reverse the recent bearish trend.
Whale Activity Intensifies
One of the most compelling indicators of a potential market turnaround is the behavior of large holders, known as whales. According to AMBCrypto, whale activity is on the rise, with significant acquisitions of AVAX happening 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% increase, while addresses with balances between $10,000 and $100,000 grew by 23.56%. This accumulation pattern by large holders suggests a positive outlook, as these key players are often seen as trendsetters in the market.
Declining Supply of AVAX
Another crucial factor indicating a potential price rebound is the decreasing supply of AVAX available in the market. Exchange net outflows have significantly decreased, indicating that more AVAX is being withdrawn from exchanges than deposited.
In the last 24 hours, $9.61 million worth of AVAX was withdrawn from exchanges, contributing to a weekly net outflow of $69.21 million—the highest since April 4, 2022.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 decreasing supply could exert upward pressure on the price, especially if demand continues to rise.
Positive Open Interest Weighted Funding Rate
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 themselves for a potential rally. A positive funding rate often indicates that traders expect higher prices in the near future.
What’s Next for AVAX?
While AVAX’s recent performance 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 positive outlook, AVAX could experience a significant recovery, overcoming the losses incurred over the past week.
Investors should closely monitor these developments. The alignment of these factors could pave the way for a new market phase, potentially driving AVAX’s price higher from its current levels. As always, it is important to stay informed and consider all market signals before making investment decisions.
Conclusion
AVAX’s price has recently experienced a sharp decline, but emerging data suggests a potential turnaround. With increased market participation, significant whale activity, and a decreasing supply, the conditions are favorable for a bullish reversal. Investors and traders should closely monitor these key indicators, as they could indicate a shift in market momentum that may lead to a substantial price recovery.
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