Avalanche (AVAX) lagged behind Bitcoin (BTC)’s plunge, also cut 6% in price in the past 24 hours.
On the positive side, AVAX/USD looks solid and rising after yesterday’s dip, suggesting a correction ahead of a potential uptrend.
AVAX is currently trading at $25.10, up 7% in the past seven days, Coingecko data showed on Friday. But people should be on the lookout for the $25 area.
If the price can retrace to this level or above this range, then there is a high probability for a bull run.
Suggested Reading | Binance Coin Trading Volume Surges 35% as BNB Hits $274
Will AVAX continue its retracement or maintain upside potential?
A week ago, AVAX seemed to have rebounded from forming its corner. A breakout was also suggested after a consistent strong rally.
Now Avalanche was able to execute a strong breakout just above the resistance line. This was robust but fairly limited upside potential following its recent pullback.
It had its weekly high set at $26.30 but maneuvered a slight retracement showing the current state of the market. So, the question now is whether AVAX will continue its retracement or go all-in with its upside potential?
AVAX’s recent breakout is a positive sign that the price has passed a crucial restriction point. AVAX’s most recent reversal occurred just after the Money Flow Index (MFI) intercepted the distribution zone.
There has been an amplification of the selling pressure seen in the crypto market over the past few days, which has given the bulls some breathing room after their last run. However, this deprived them of the possibility of going higher.
AVAX total market cap at $7.05 billion on the daily chart | Source: TradingView.com
The current retracement outlines the HODLing activity of the majority of AVAX holders, which could be a preparation for a bullish rally after its collapse in June.
Nevertheless, AVAX should strengthen thanks to the aggressive expansion of its network. There is robust development activity underway which was maintained by Avalance in July, encouraging strong AVAX flow and the ability to maintain fierce price action despite the setbacks.
Suggested Reading | Cardano (ADA), after a 35% spike, locks onto the next target: $0.55
AVAX growing exponentially
July has been a good month for Avalanche so far, especially after seeing phenomenal growth in NFT trading volumes.
Yes, NFT trading volumes have grown exponentially over the past two weeks, which has largely contributed to the increase in demand for AVAX.
More so, the absence of a sell-off is a good indicator that market sentiment still favors the bulls. The future is indeed very bright for AVAX, especially with its formidable service power, energy efficiency and massive growth.
Featured image from The Daily Hodl, chart from TradingView.com