AVAX plunges on questionable whale trades: What now?

Avalanche (AVAX) dropped 10% in just a few hours, largely due to heavy whale trading. A well-known entity transferred 1.96 million AVAX worth $54.2 million to major exchanges Coinbase, Binance, and Gate, as well as via THORChain.

AVAX is in trouble. Its 50-period moving average (MA) has fallen below the 200-period MA, forming a bearish signal commonly referred to as a "death cross."

At press time, AVAX price was hovering near the 200-period MA with key resistance around $25.73. Volume increases significantly during major price drops, especially when the price drops from around $28 to below $26. This indicates active selling pressure in the market.

Still, there's hope for a quick recovery for AVAX. The data shows a significant reduction in investment from "in-the-money" investors, suggesting these holders have sold off their positions and may have suffered losses. If the number of “out-of-the-money” addresses continues to decline or stabilizes, while the number of “in-the-money” addresses increases, AVAX may be in for a sustained period of recovery.

However, external market factors or another massive sell-off could derail this.

Market sentiment is currently mixed. While whales may bring stability and increase investor interest, retail selling pressure may still have a negative impact.

AVAX has experienced a sharp decline, primarily due to selling pressure triggered by whale trading. However, the market is not all hopeless, and if the number of “in-the-money” addresses increases, AVAX may see a period of recovery. Investors should remain vigilant and pay close attention to market trends and changes in external factors.

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