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Avalanche has been going up the chart ladder since the start of the year, following the broader crypto market rally as major cryptocurrencies break through crucial resistances. But at the moment, its indigenous symbolic avax appears to have found a new ceiling.
According to Coingecko, AVAX is down 10% in the daily time frame, landing it a spot as one of the bigger losers as of today, January 25th. This has led to speculation that Avalanche’s most recent rally that was triggered by partnerships with Amazon Web Services and with Alibaba was just a so-called “buy the rumor, sell the news” event.
The saying, "buy it, sell the news" describes a common trading technique whereby investors purchase a security based on rumours about an announcement or imminent data, and resell the property once it's back on the market.
This could afford the trader an opportunity to purchase the security before everyone else does so that he or she can sell it at a profit when demand and price rise.
Image: CoinCentral
External And internal forces have an impact on AVAX.
Although developments on the chain have been particularly optimistic, the forces of the external market appear to be the dominant force in the token shift today. At the time of writing, Bitcoin and Ethereum have approached their respective resistances with no breakthroughs made by the two cryptos’ bulls.
But with recent developments like the ecosystem’s partnership with Canadian e-commerce company Shopify, we might see Avalanche become more mainstream as consumers from Shopify familiarize themselves with the ecosystem.
However, recent news shows that on-chain metrics have not improved since the announcement of the partnerships. The number of validators is always in the range of 1200. Nor does the realm of challenge display any avalanche promises.
Image: DefiLlama
According to DefiLlama, the ecosystem’s total value locked declined 3% since yesterday. This may be a sign of a slight loss in investor confidence as investors feel misled by recent market developments.
At $16.96, why are investors waiting?
Investors are pretty pessimistic as a result of the recent $19 rejection. According to CoinGlass data, short sellers out-number the long buyers by a significant margin, adding to the overall bearish weight of the situation.
Image: Coinglass
If the token keeps doing worse and firm today below $16.85, we might see the bears retesting the support range of $15.74. But chain changes should be able to follow current market sentiment.
With the strong correlation of the token with Bitcoin and Ethereum, investors and merchants should also watch the price movements of these coins. At the time of writing, the BTC market bears are retaining $22,661 in support and $1,520 in support simultaneously.
AVAX total market cap at $5.4 billion on the daily chart | Chart: TradingView.comAt this time, long-term AVAX holders are expected to prepare for the short to medium term as bears attempt to make their way. Avax bulls should also try to consolidate over their support as this would allow the token to have a strong board to explode across the $19 resistance.
-TD Ameritrade's featured image.
