Avalanche’s native token, AVAX, has encountered a serious setback, dropping a staggering 29.12% in value over the last week. Just in the past 24 hours, the cryptocurrency tumbled by 14.05%, leaving many investors anxious about its prospects. Yet, there are early signals that a bullish reversal might be just around the corner.
Surge in Active Addresses and New Market Entrants
Recent statistics show a noteworthy rise in key address metrics, hinting at a heightened interest in AVAX. Specifically, the number of Active Addresses (AA) has skyrocketed by 44.50% over the past week, reflecting an uptick in transaction activity from existing users. At the same time, New Addresses (NA) have jumped by an impressive 142.90%, revealing that a fresh wave of investors is finding AVAX appealing.
This mix of intensified involvement from both seasoned holders and newcomers points to a bullish signal. More participants usually indicate a stronger market interest and may pave the way for a reversal of the current bearish trend.
Whale Activity Intensifies
A crucial indicator of a potential market reversal comes from monitoring the actions of whales, the large holders of crypto assets. According to AMBCrypto, there’s been a notable uptick in whale transactions, with significant purchases of AVAX across various address categories.
Over the last seven days, addresses holding between $1 million and $10 million worth of AVAX have surged by 24.08%. Likewise, those with holdings between $100,000 and $1 million increased by 20.13%, while addresses with balances between $10,000 and $100,000 saw a growth of 23.56%. This accumulation trend among large investors signals a potential bullish outlook, as these influential players often set market trends.
Declining Supply of AVAX
Another encouraging sign for a price rebound is the diminishing supply of AVAX available in the market. There’s been a significant dip in exchange net outflows, indicating that more AVAX is being withdrawn from exchanges than is being deposited.
In just the last 24 hours, $9.61 million worth of AVAX was withdrawn, contributing to a weekly net outflow of $69.21 million—the highest since April 4, 2022. This drop in supply could create upward pressure on the price, especially if demand continues to rise.
Positive Open Interest Weighted Funding Rate
To add to the optimism, the Open Interest Weighted Funding Rate has turned positive. This metric indicates the sentiment among sophisticated traders, who are beginning to position themselves for a potential rally. A positive funding rate typically suggests that traders anticipate higher prices in the near future.
What’s Next for AVAX?
Despite the recent downturn of AVAX, the combination of increased active addresses, intensified whale activity, and decreasing supply paints a hopeful picture for a potential price reversal. If momentum continues to shift towards a more positive outlook, AVAX could see a significant recovery, potentially reclaiming losses from the past week.
Investors are encouraged to stay updated on these developments. The confluence of these factors could signal the launch of a new market phase, potentially driving AVAX’s price upward from its current state. Keeping a keen eye on market signals could be invaluable in making informed investment decisions.
With all signs pointing to a potential turnaround in AVAX, the current decline may not be the end of the line. Instead, it might just be a setup for what lies ahead—an intriguing possibility for those watching closely.
