Avalanche (AVAX) may pare recent gains due to weak demand.
Avalanche (AVAX) broke above the upper line of the descending channel on May 13, and the price has risen by about 10% since then.
But this rally may be short-lived as on-chain data suggests that demand for the altcoin has waned over the past week.
Avalanche Whales want to avoid trouble
A review of AVAX's user activity over the past seven days shows a decline in demand for the 25th largest cryptocurrency by market capitalization.
During that period, the daily count of active addresses completing transactions involving AVAX decreased by 18 percent.
The altcoin also saw a drop in new demand. Last week, new addresses created daily to trade AVAX decreased by 2%.
In addition, AVAX reduced whale activity for about a month. While the price broke above the May 13 threshold and continued to rise, large AVAX investors reduced their exposure.
Read more: How to buy Avalanche (AVAX) and everything you need to know
Over the past 30 days, the number of AVAX transactions between $10,000 and $100,000 has decreased by 26%. Similarly, transactions between $100,000 and $1 million saw a 17 percent decrease over the same time frame.
AVAX Price Prediction: Weakening token risks
Although AVAX has seen a rally since breaking above the upper line of the descending channel, its Aaron Up line has been seen down.
This indicator identifies the strength of the asset's trend and possible reversal points in its price movement. When the Aroon Up line is close to zero, the increase is weak, and the latest peak has been reached a long time ago. This could indicate a potential trend reversal.
At press time, the AVAX Aroon Up Line was 28.57%.
Also, readings from the Parabolic Stop and Reversal (SAR) indicator put the point above the AVAX price at press time.
This indicator identifies the asset's potential trend direction and reversal points. When the dotted lines rest on an asset's price, it is a bearish signal indicating that the asset's price may begin to decline.
If the bulls fail to sustain the current AVAX rally and the bears gain full market control, the token price may drop to $34.99.
However, if this forecast is rejected and sufficient liquidity enters the market, the price of AXAX could rise to $37.45.
Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions. Please note that our terms and conditions, privacy policies and disclaimers have been updated.
