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Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

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Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

At the end of July, Avalanche (AVAX) saw its price surge above $33. However, as of now, the token has retraced by $13, and without significant support, it risks further declines.

This outlook isn’t merely speculative; there are solid indicators supporting this bearish trend unless market conditions change.

On-Chain Data Signals a Major Warning for Avalanche

The In/Out of Money Around Price (IOMAP), a key on-chain metric, underpins this forecast. IOMAP reveals the distribution of addresses holding a token at a profit, break-even, or loss at a particular price level. Traders often use this data to pinpoint price levels where cryptocurrencies might experience significant movement.

Typically, price ranges with a high number of addresses provide strong support or resistance. However, a larger number of addresses in the red (out of money) tends to act as resistance, while those in the green (in the money) offer support.

Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

In the case of Avalanche, 82,670 addresses acquired 7.26 million tokens at an average price of $21.12, currently sitting at unrealized losses. On the other hand, 70,930 addresses purchased 1.02 million AVAX at approximately $19.95, and are in profit. This imbalance indicates potential resistance from selling pressure if the price approaches $21.

If AVAX lacks sufficient buying momentum, it could face rejection around the $21 mark, potentially dropping to the next support level near $19.62.

Further evidence from the order books of the top 20 exchanges aligns with this view. Data from Exchange-Onchain Market Depth, reported by BeInCrypto, shows more tokens are listed for sale than purchase between $20.61 and $20.62, indicating possible selling pressure if buyers do not step in to absorb the supply.

Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

AVAX Price Prediction: A Decline to $19 or Even $17 Possible

Recent price trends show that AVAX has underperformed relative to the broader altcoin market. The token experienced a steep 40% correction between July 22 and August 6, and it is currently trading below the 20-day Exponential Moving Average (EMA), a technical indicator that tracks trend direction.

Typically, a price above the EMA signals a bullish trend, while trading below suggests bearish momentum. Given AVAX’s current position below the EMA, the trend appears bearish. If this continues and bulls fail to defend the token, the next key support level could be around $19.56. Failure to maintain this support might lead to a drop to $17.03.

Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

Conversely, should buying pressure increase, AVAX could rally to $23.07. With sustained momentum, the price might break above the EMA at $24.25 and potentially reach $26.64.

Avalanche (AVAX) Price Forecast: A Potential Drop Looms as Selling Pressure Mounts

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