SoFi Platform’s Hack Fuels AVAX to Target 10 Dollars Once Again

Crypto News- Avalanche (AVAX) has experienced a continuous downtrend since the hacking incident that hit Stars Arena on October 7. This decline has also confirmed the significance of the long-standing $10.50 horizontal area as a stubborn resistance level.

SoFi Platform’s Hack Fuels AVAX to Target 10 Dollars Once Again

A closer look at the weekly technical analysis reveals that AVAX’s price failed to maintain its upward momentum in the previous week. Despite initially reaching a high of $11.88, it could not manage to close above the pivotal $10.50 horizontal resistance zone.

In fact, the price formed a pronounced long upper wick (indicated in red) before dipping below this crucial level. The $10.50 area holds significance as AVAX had traded above it since 2021. However, it fell below this threshold in August and made an unsuccessful attempt to reclaim it last week, thereby solidifying it as a resistant barrier.

The previous uptrend in AVAX’s price had gained momentum following the introduction of Stars Arena, a Social Finance (SoFi) platform built on the Avalanche blockchain. Notably, Stars Arena is an offshoot of Friend.tech, another SoFi platform that had been grappling with phishing issues.

Unfortunately, Stars Arena fell victim to a hack on October 7, and this incident might have triggered the ongoing downtrend in AVAX’s price. Nevertheless, the team behind Stars Arena managed to recover 90% of the stolen funds through negotiations with the attacker, although this recovery came at a cost of 27,610 AVAX, valued at $252,000 at the current market price. Subsequently, a new smart contract has been implemented to enhance security.

AVAX Price Prediction: Could Bearish RSI Signal Further Decline?

The weekly Relative Strength Index (RSI) supports the possibility of a continued price decrease. Market traders rely on the RSI as a momentum indicator to detect overbought or oversold conditions and make decisions about asset accumulation or divestment.

An RSI reading above 50, coupled with an upward trend, signifies an advantage for bulls, while readings below 50 suggest the opposite. The current RSI indicator is positioned below the 50 mark and is trending downward, both indicative of a bearish trend. If the decline persists, the nearest support level can be found at $4.40, which is approximately 50% below the current market price.