Ranked as the 12th most valuable cryptocurrency, Avalanche (AVAX) has seen a notable price decline in the last 24 hours. While AVAX trades at $26.93, interaction with the blockchain platform is starting to pick up.
Typically, the rise in engagement on the network should precede a bounce. However, on-chain analysis shows that the market may wait slightly longer before the cryptocurrency reaches that expectation.
Rising User Activity on Avalanche Yet to Reflect in AVAX Price
A look at IntoTheBlock shows that active and new addresses on Avalanche have been rising. Active addresses often act as a leading indicator of the price.
When this metric rises, it implies that more users are participating in transactions on-chain, reflecting a rise in demand. New addresses, on the other hand, track the number of participants bringing new money into the ecosystem.
The rise in both metrics indicates optimism about the AVAX price. However, the growth in user activity does not always translate to a price increase. In Avalanche’s case, it will likely be the other way around.
Read more: 11 Best Avalanche (AVAX) Wallets to Consider in 2024
One of the reasons for this forecast is the social dominance. Social dominance measures the rate of discussions about a project on social media platforms.
Further, this metric compares the conversations about one project to others in the top 100. Three days ago, Avalanche’s social dominance was 1%, and the price hit $32.99. But at press time, the ratio is half of the previous value.
Should the project continue to experience a drop in conversations, AVAX price may also follow. The next segment discusses how the price may fare going forward.
AVAX Price Prediction: Will Bulls Step In Before 20% Drop?
The daily chart shows the formation of a bearish flag. This technical pattern indicates the formation of a flagpole that appears during a downtrend and is followed by a short-term upswing.
Once the downtrend begins again, the bearish flag signals the continuation of the downtrend. According to the chart below, AVAX risks another 20% decline, which could cause the price to fall to $21.88.
The Relative Strength Index (RSI), which gauges momentum, also supports this prediction. As seen below, the RSI has fallen below the neutral line. If the decline continues, AVAX may experience a full-blow bearish momentum that validates the downswing.
Read more: How To Buy Avalanche (AVAX) and Everything You Need To Know
However, the prediction will be invalidated if buying pressure increases. If this happens, the price of AVAX may rebound, and the possible target may be between $29.50 and $31.85.
Disclaimer
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