Avalanche (AVAX) troubles continue as price hits fresh six-month low

Recent Avalanche (AVAX) price trajectory has been marked by a series of sharp declines. The 15% drop over the past week has sent Avalanche price below its past six-month low.

Trading at approximately $24.51 at the time of writing, AVAX price has dropped by 60% since hitting a high of $60.39 in March.

More trouble ahead for Avalanche (AVAX)

As if the current decline is not enough, technical analysts have pointed to a troubling head and shoulders pattern, a classic indicator of potential further downside.

According to experts like Crypto Patel, the breach of critical support levels suggests a looming correction of 40-60%, potentially pushing AVAX’s price to levels as low as $19 or even $13.

📉 AVAX/USDT Chart Analysis:$AVAX is forming a head & shoulder pattern. The NECK LINE support is broken, indicating a bearish trend.

Expecting a 40%-60% downside move. Targets: $19 & $13.

Not saying don’t open long scalps, but use strict stop loss. Trade wisely!#Crypto… pic.twitter.com/FFetHS2GZc

— Crypto Patel (@CryptoPatel) June 23, 2024

This technical bearishness has exacerbated selling pressures, with large-scale transactions by prominent AVAX holders intensifying market panic.

AVAX whale activities surge

One of the primary drivers behind AVAX’s recent price woes has been significant whale activity.

A notable entity, identified by ZachXBT as “0x32…4f30,” has transferred a substantial amount of AVAX — approximately 1.96 million coins worth $54.2 million — to major exchanges like Binance, Coinbase, and Gate.

The timing of these transactions coincides with broader market pullbacks and heightened volatility across the crypto landscape, further amplifying AVAX’s price volatility.

This massive sell-off has not only flooded the market with supply but has also contributed to AVAX’s market cap falling below $10 billion, relegating it to the fourteenth position among cryptocurrencies. Even meme coins like Shiba Inu (SHIB) have flipped Avalanche (AVAX) as whale activity surge.

Market sentiment amid the Avalanche price drop

The market sentiment surrounding AVAX has turned cautious, if not outright negative. Analysts and commentators have expressed concerns over the sustainability of AVAX’s previous market hype.

For instance, ‘Crypto Mechanic’ noted AVAX as the first high-cap coin to break its yearly low, signaling a loss of market confidence.

$AVAX Broke into the new yearly Low
what’s going on there? THE first high cap coin that broke the low i think. pic.twitter.com/p37kBXrXCL

— Crypto Mechanic (@CryptomechanicX) June 22, 2024

Comparisons to other cryptocurrencies like Cardano 2.0 by ‘The Crypto Monk’ also underscore the fading allure of AVAX in current market conditions.

AVAX hype is so far gone this cycle… It looks like nothing will save it from becoming Cardano 2.0 https://t.co/M6snZLKBUZ

— The Crypto Monk (@thecryptomonk) June 22, 2024

Dr. Martin Hiesboeck from Uphold has also voiced confusion over AVAX’s sharp decline, citing its strong growth momentum and partnerships in the blockchain industry.

This is huge. The price of $Avax going downhill like an avalanche makes no sense. Total volume on avalanche is over $18 billion since the start of the year. Nobody comparable has this growth momentum. And now a major game developer Avalanche must be the most underestimated… https://t.co/jNqrKsovHC

— Dr Martin Hiesboeck (@MHiesboeck) June 22, 2024

Notably, despite collaborations with major entities like game developer Konami for launching NFT platforms on Avalanche, these positive developments have not shielded AVAX from broader market downturns and investor skepticism.

Will Avalanche recover?

Despite the prevailing market challenges, there are some positive developments that could potentially support Avalanche’s price recovery.

One is the recent launch of AVAX staking on Coinbase, which represents a significant step towards enhancing the token’s utility and attracting long-term investor interest. The staking initiative allows AVAX holders to earn rewards by participating in network validation, thereby adding a layer of passive income generation amidst price volatility.

Additionally, Avalanche’s focus on real-world asset (RWA) tokenization and strategic partnerships continues to provide fundamental support.

Projects like the NFT platform by Konami leverage Avalanche’s capabilities in scalability and low transaction fees, potentially driving adoption and utility demand for AVAX in the future.

However, it remains to be seen whether AVAX price will maintain above key support levels for its to orchestrate a price recovery.

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