Avalanche (AVAX) is currently trading at $12.05, reflecting a 2.5% decline over the last 24 hours. This price movement occurs amidst reports that JPMorgan Chase is considering offering cryptocurrency trading services to institutional clients. However, this news has provided only limited support for the asset as it continues to hover near its December lows.
The recent announcement from JPMorgan marks a significant shift from CEO Jamie Dimon”s previously critical view on digital assets, suggesting a potential increase in institutional acceptance of cryptocurrency. Despite this, the anticipated boost in adoption has yet to translate into notable upward momentum for AVAX, which remains under pressure from broader market trends.
While traditional markets have shown strength, with the S&P 500 gaining 0.9%, this resilience has not benefited the cryptocurrency sector. The divergence indicates a disconnect between the performance of traditional assets and cryptocurrencies, leaving AVAX”s technical indicators to guide price action.
Currently, AVAX is trading below all major moving averages, with the 7-day simple moving average (SMA) at $12.06 acting as immediate resistance. The gap to the 200-day SMA at $21.12 highlights the severity of the recent downturn. Trading volume on Binance is at $41.6 million, indicating moderate institutional interest, yet remains below levels typically observed during significant market movements.
Technical indicators reveal that AVAX is near the lower Bollinger Band at $11.23, with a %B reading of 0.24 suggesting oversold conditions. The Relative Strength Index (RSI) is currently at 39.33, indicating neutral territory, while the Moving Average Convergence Divergence (MACD) is negative at -0.72, albeit with a slight positive histogram reading indicating that bearish momentum may be slowing.
Traders should focus on critical price levels in the near term. Immediate resistance is found at $12.94, aligning with the 20-day moving average and the middle Bollinger Band. On the downside, support is pegged at $11.26, a crucial level that, if broken, could lead to further declines towards the 52-week low of $11.44.
In the current market context, Bitcoin”s ongoing weakness is adversely affecting AVAX, which, despite its utility in the decentralized finance (DeFi) ecosystem, is closely following overall market sentiment. Although traditional markets demonstrate resilience, this influence has not extended to cryptocurrencies, leaving AVAX vulnerable to further downside.
Looking ahead, a bullish scenario for AVAX would require a sustained move above the $12.94 resistance level, ideally accompanied by increased trading volume, which could target the 50-day moving average at $14.27. Conversely, failure to maintain support at $11.26 could result in a downward trend towards yearly lows, exacerbated by ongoing Bitcoin weakness and a lack of specific catalysts for Avalanche.
For risk management, conservative traders may consider setting stop-loss orders below $11.00, particularly in light of the current average true range (ATR) of $0.82, which suggests potential daily price fluctuations of approximately 7% in either direction.
