Avalanche (AVAX/USD) has lost 90% of its value since the November 2021 high. The token has been falling alongside other major cryptocurrencies in the bear market. The bear momentum is still high, with the cryptocurrency trading at $15. In the past one week, AVAX has lost more than 5% and is looking to head to $10. What’s happening?
Avalanche has been touted as an alternative platform to Ethereum for DeFi and NFTs. However, the two nascent blockchain sectors have been hit this year. According to data by Dune Analytics, NFT’s weekly trading volume has dropped by a massive 98% this year. The total trading volume at the end of January 2022 was $6.2 billion but now stands at $114.
NFTs and DeFi decline has been a significant blow to blockchains like Avalanche. That’s because the blockchain had crafted a name around the evolving sectors. Consequently, it may take time before investors flock back, suggesting that a bear market could last longer. Going by the recent decline, bears are in control of AVAX, with a lower price on the horizon.
AVAX price outlook as momentum weakens
Source – TradingView
The daily chart shows AVAX trades on a system of lower lows and lower highs on a weak momentum. The MACD indicator is deep in the bear zone.
At the current level, AVAX is trading at a potential pivot point. However, momentum is weak, giving bears a chance to take the cryptocurrency lower.
What next for AVAX?
With the weak momentum, we rate a reversal chance at $15 very low for AVAX. The cryptocurrency is not a buy since it may continue to slide, finding support at $10. The support is crucial since it marks the zone where the crypto boom started in 2021.