After a broader crypto market rally as the major cryptocurrencies, the avalanche has been going up the charts since the start of the year. break through critical resistance. But right now, its native token AVAX seems to have found itself a new ceiling.
According to Quingueco, AVAX is down 10% in the daily time frame, making it one of the big losers as of today, January 25. This led to speculation that Avalanche’s recent rally was sparked by his partnership. Amazon Web Services And with Alibaba There was only one so-called “buy the rumor, sell the news” event.
The saying “buy the rumor, sell the news” describes a common trading technique in which investors buy a security based on rumors about an upcoming news announcement or data, and then sell the asset after the news is out. are
This allows the trader to buy the security before everyone else does so that he can sell it at a profit when demand and price rise.
External and internal forces affect AVAX.
Although the series’ progress has been particularly rapid, external market forces seem to be the dominant force behind the token’s slippage today. At the time of writing, Bitcoin And Ethereum The two cryptos have reached their respective resistances without any breakthrough from the bulls.
But with recent developments such as ecosystems Partnership With Canadian e-commerce company Shopify, we may see Avalanche become more mainstream as Shopify users familiarize themselves with the ecosystem.
However, recent News Shows that the on-chain metrics have not improved since the partnership was announced. Since then the number of verifiers is still around 1,200. The DeFi sphere doesn’t show the promise of an avalanche either.
According to defillama, the total value of the ecosystem has decreased by 3% since yesterday. This could be a sign of a slight loss in investor confidence as investors may have felt misled by recent market movements.
At $16.96, what’s in store for investors?
Investors are slightly bearish due to the recent rejection at $19. According to CoinGlass dataShort sellers outperform long buyers by a significant margin, adding to the overall bearish weight of the situation.
If the token continues to deteriorate and close below $16.85 today, we could see the bears retest the $15.74 support range. However, on-chain developments should be able to keep up with current market sentiment.
With the token’s high correlation with Bitcoin and Ethereum, investors and traders should also keep an eye on the price movements of these coins. As of writing, bears in the BTC market are retesting the $22,661 support while ETH is retesting the $1,520 support at the same time.
AVAX total market cap at $5.4 billion on the daily chart | Chart: TradingView.com
For now, long AVAX position holders should brace themselves for the short to medium term as bears try to claw back their positions. AVAX bulls should also look to consolidate above their support as this will give the token a strong platform to break through the $19 resistance.
Featured image by TD Ameritrade
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