Towards the end of July, the Avalanche (AVAX) price crossed the $33 mark. At the time of writing, the token has lost $13 of that value, and if not careful, it could fall much further.
However, this is not just a rumor. There are reasons to believe that this trend is true unless something changes.
On-chain data issues major avalanche warning
The ln/Out of Money Around Price (IOMAP) is the leading indicator driving this prediction. This on-chain metric shows the number of addresses holding a token that is making profits, breaking even, and making losses at a given price.
This data allows traders to identify specific price levels where a cryptocurrency may move. Typically, the higher the addresses are in a price range, the stronger the support or resistance it provides.
However, it is important to note that a higher number of out-of-the-money addresses acts as resistance, while a higher number of in-the-money addresses provides support. For Avalanche, 82,670 addresses bought 7.26 million tokens at an average price of $21.12. This cohort is out of money and is holding with unrealized losses.
Read more: The 11 Best Avalanche (AVAX) Wallets to Consider in 2024
Meanwhile, 70,930 addresses have purchased 1.02 million AVAX, or around 19.95, and are in the money. The difference between these two sides shows that the cryptocurrency could face resistance from potential selling pressure.
If AVAX does not have a relatively high buying pressure, the price could face rejection as it approaches $21. In this case, the next level for the token could be around $19.62.
Furthermore, information from the order books of the 20 largest exchanges supports this position. Using the Exchange Onchain Market Depth, BeInCrypto finds that between $20.61 and $20.62, there are more tokens lined up on the ask side (sell) than on the bid side (buy).
A higher number of cryptocurrencies prepared for sale than available for purchase indicates potential selling pressure if the number of buyers does not keep up with the amount sold.
AVAX Price Prediction: Either $19 or $17
Judging by its recent price action, AVAX has underperformed the broader altcoin market, with the cryptocurrency suffering a 40% correction between July 22 and August 6, for example.
It is also trading below the 20-day EMA (blue). EMA is an acronym for Exponential Moving Average and is a technical indicator that measures trend direction. When the price is trading above the EMA, the trend is usually bullish.
Therefore, AVAX’s current position below the EMA suggests a bearish trend. If this trend continues and the bulls fail to defend the token, the next price level for AVAX could be around $19.56. If the cryptocurrency struggles to hold on to this region, the price could drop to $17.03.
Read more: How to buy Avalanche (AVAX) and everything you need to know
However, if the buying pressure increases, AVAX could rise to $23.07. If it continues to tighten, the cryptocurrency’s value could surpass the EMA at $24.25 and reach $26.64.
Disclaimer
Per the Trust Project’s guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions can change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy and Disclaimer have been updated.
