Avalanche dropped 16.34% in 7 days, with its market cap falling to $11.16 billion.
AVAX price shows bullish divergence on the RSI, but EMA crossovers signal bearish trends.
A 28% upside is possible if AVAX retests the 200-day EMA at $34.34.
Strong resistance exists between $27.38–$28.17, holding 11.41 million AVAX supply.
With Avalanche dropping by nearly 45% in its trading volume, Avalanche is now retesting the $27 mark. With a 16.34% drop over the past seven days, Avalanche’s market cap is down to $11.16 billion.
While maintaining its spot as the 12th biggest cryptocurrency in the market, the rising risk of a downfall warns of a pullback to $20.
Avalanche Price Trend: Falling Channel Pattern in Focus
In the daily chart, the Avalanche price trend showcases a falling channel pattern. Within the pattern, AVAX price has dropped by more than 50% over the past 55 days.
Avalanche price chart
Currently, the AVAX price trend reveals lower price rejections near the support trendline. With an intraday recovery of 2.27%, Avalanche hints at a potential comeback within the bearish pattern.
Supporting the upside chances of a new bull cycle within the bearish pattern, the daily RSI line reveals a bullish divergence. However, the exponential moving average (EMA) lines trigger a sell signal.
This is because of a bearish crossover between the 50 and 100 EMA lines and the 20 and 200-day EMA lines. Furthermore, it also increases the chances of a death cross event between the 50 and 200-day EMA lines.
Nevertheless, a potential recovery might retest the 200-day EMA line at $34.34 near the overhead trendline. This projects an upside potential of 28%.
Potential for a V-shaped Reversal
Furthermore, it will propel Avalanche back to pre-market crash levels and create a V-shaped reversal. Additionally, it will increase the chances of a breakout rally to reach the previous swing at $54.
On the flip side, the breakdown rally will likely test the crucial support level at $22 or the $20 psychological mark if the downfall continues.
Avalanche On-Chain Activity Surges: A Bullish Signal?
Over the Avalanche network, the surge in activity is hinting at a bullish rally. In a recent by IntoTheBlock, the daily active indices have exceeded 250,000.
Avalanche Daily Active Addresses
This is the highest on-chain activity in Avalanche since May 2023. Furthermore, the recovery action in the daily active indices is hinting at a potential surge to 300,000, last seen in January 2023. Amid the rising activity, the growing demand for AVAX tokens will likely propel its market value.
Social Sentiment Boosts for Avalanche
Supporting the network activity, the social activity in the real-world asset (RWA) sector is spiking up. Avalanche remains the third biggest RWA token based on social activity with 7.6K mentions.
📊Social activity in the RWA sector is edging up today. Real-world assets with leading social mentions include:
1 Chainlink2 Ondo3 Avalanche4 Injective5 VeChain6 Internet Computer7 Quant8 Maker9 Propchain10 XDC Network11 Brickken12 Propbase13 TokenFi14 Clearpool15… pic.twitter.com/osCcBfnPIU
— LunarCrush Analytics (@LunarCrush) February 4, 2025
📊Social activity in the RWA sector is edging up today. Real-world assets with leading social mentions include:
1 Chainlink2 Ondo3 Avalanche4 Injective5 VeChain6 Internet Computer7 Quant8 Maker9 Propchain10 XDC Network11 Brickken12 Propbase13 TokenFi14 Clearpool15…
— LunarCrush Analytics (@LunarCrush)
This marks a significant increase of 3.15K and reflects the sentimental boost for the RWA project.
Strong Resistance and Support On-Chain Levels
As the network activity and the social sentimental boost hint at an upside, the on-chain indicator by IntoTheBlock reveals a strong incoming resistance. Based on the in/out-of-the-money-around-price indicator, Avalanche is about to face strong resistance.
The resistance zone extends between $27.38 and $28.17, holding 11.41 million AVAX supply. Meanwhile, the current bullish sustenance of Avalanche will likely propel it to reach the $30 pinnacle. This zone holds 2.24 million AVAX supply between $30.54 and $31.46.
On the flip side, the crucial support range for Avalanche extends between $26.46 and $27.25, holding 5.03 million AVAX tokens within 214.23K addresses.