Avalanche (AVAX) has started off July on the wrong footing as price records over 3.5% dip on the day. Over a longer time frame, the price has fallen sharply downwards since its 2023 peaks. As of this writing, the daily chart shows that AVAX is trading at $17.59.
This pullback has brought the coin down to its year-to-date low of $15.30. AVAX is currently facing a decisive moment with indicators offering mixed signals. Some patterns hint at a possible recovery while other technical signals suggest continuation of the bearish trend. Investors must watch key price levels to assert whether the coin will rebound or drop further.
AVAX Price Sends Mixed Technical Signals
On the daily chart on TradingView, AVAX is currently trading below the 50-day and 100-day Exponential Moving Averages (EMA) indicators. Normally, such price action indicates an aggressive bearish trend.
The continued plunge reflects waning momentum and investor caution, especially as other altcoins experience similar drawdowns in a cautious market. One concerning pattern forming on the AVAX chart is the inverse cup-and-handle. This pattern is a well-known bearish continuation setup. It consists of a rounded top followed by a brief pullback or consolidation.
Nevertheless, not every signal is negative. AVAX has formed a triple-bottom pattern that can be regarded as bullish technical formation. From this pattern, the major support is at $15.25 with the neckline at $26.79 acting as strong resistance. A valid break above this resistance would push the coin towards the $37.30. Such a rally would mean a 112% jump from current levels and slightly above the 50% Fibonacci retracement from the November highs.
This positions the level $15.25 as a pivotal level. A break under the support could result in further decline. However, a rebound would rekindle bullish momentum for AVAX.
Avalanche Network Activity Surge
The network fundamentals of Avalanche are becoming stronger despite the bearish price action. Avalanche experienced the highest increase in transaction activity among all the significant blockchains over the last month. As per data by Nansen, the number of transactions increased by 233% to more than 32.19 million.
The network outperformed other chains including the BNB Chain and the Sei network. BNB Chain’s transactions have only pumped by 152% while transactions on Sei went up by 136% over the last one month.
Avalanche’s network activity influx has also contributed to an increase in transaction fees. The fees have gone up by 48% to $788.08K during the same time frame. However, on this metric, Sei outperformed Avalanche as fees surged by 354% but only reached $22.33K
The skyrocketing network activity seems to be connected to two significant events: the official decision of FIFA to choose Avalanche as a blockchain of its NFT marketplace, and the ever-growing popularity of stable coins on the network.
With Avalanche’s network activity surging, it implies that the ecosystem is experiencing real-world adoption and growth. In particular, the network is gaining traction in digital collectibles and the decentralized finance (DeFi) sector. Though the price of AVAX is not yet in tandem with the on-chain fundamentals, this network growth may provide the foundation of eventual value appreciation.
