CoinDesk report:
AVAX is the first-layer blockchain currency of Avalanche smart contracts, with a current trading price of 28.25. Why do I feel that AVAX will continue to rise and perform well in this bull market?
The demand for Avalanche is not due to FOMO
Avalanche is not the only altcoin to recover in the past 24 hours. Many other tokens in the top 20 market cap have done the same. However, not all cryptocurrencies can sustain an upward trend. But AVAX is not one of them.
First, we look at the social search volume. Avalanche’s social search volume has reached a new high since June 27th, and is still at a healthy high at the time of writing. Social dominance measures the search level of cryptocurrencies. Usually, when there is a major development, random searches for assets will increase.
For example, Solana (SOL) has experienced an increase in this index. This was driven by the growth in the number of Solana ETF applications, indicating that participants were buying it due to FOMO. This means that positive developments have led to demand for SOL and an upward trend.
In the case of AVAX, there is no such thing. Therefore, the increase in social volume seems natural, reflecting a strong surge in trust. If this index continues to rise, AVAX may avoid a pullback. Instead, it may experience a more significant upward trend than the 6.32% recorded in the past 24 hours. Historical data also supports this trend, with the token experiencing a significant increase to 36.80 on June 6th.
Support is emerging, preparing for a rise?
Like social volume, the on-chain analysis around price’s fund in/out (IOMAP) index supports a higher value for AVAX in the short term. IOMAP measures the price range at which coin holders are buying their tokens. Through this indicator, traders can identify support or resistance areas. The more addresses accumulated at a certain point, the more it can support or resist.
IOMAP shows that 4,100 addresses purchased 2.62 million AVAX at an average price of 28.54. At the same time, 53,540 addresses bought 1.21 million tokens at an average price of 27.29.
While those who bought at 28.54 are losing, those who bought at 28.54 are facing profits. Therefore, the rise may support AVAX’s upward trend, which could help the cryptocurrency surpass the resistance of 28.54.
Buying pressure keeps it rising
The daily chart has similar views to the on-chain analysis above. Reflected in the Fibonacci retracement index, this index indicates whether the cryptocurrency will continue its current trend or reverse. It determines the price milestone to be reached or the level that can be reversed. As of the time of writing, AVAX is approaching the resistance level of 28.54, which is the 0.238 Fibonacci level.
In addition, the CMF index has also left the negative zone. CMF measures cash flow. Combined with other indicators, it can use the levels of buying or selling pressure to show whether the trend will continue. Therefore, a rise to 0.04 means buying Avalanche tokens.
If this situation continues, the price of AVAX may reach the first target of 31.39. If the bulls successfully surpass any potential resistance, AVAX may rise. However, if demand for the token decreases, this prediction may fail. CMF is another factor that could drag down the price of AVAX. If the CMF reaches 0.20, the cryptocurrency will be overbought. If this happens, prices may fall. In the case of extreme decline, it will fall by 23.92.
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