April is coming to an end, and Avalanche has had a good month so far. The network has experienced rapid growth, particularly in terms of daily active users. Will this growth, however, have a positive impact on AVAX’s price action?
The most recent daily active users data from Avalanche revealed a significant increase in the last two weeks. The number of daily active users recently reached a 6-month high. The development highlights healthy network activity, which is consistent with Avalanche’s positive progress this year.
Daily $AVAX Users have just reached a 6 month high at around 82,000 per day. 🚀 pic.twitter.com/LgiYazUGGf
— Lark Davis (@TheCryptoLark) April 24, 2023
Why AVAX might be on the verge of a potential pivot
AVAX’s price action experienced a mid-week cliff dive that resulted in a 22% pullback to its $16.76 press time price. It gave up all the gains that it had achieved in the first half of April due to this bearish price action.
Despite the downside, AVAX witnessed some signs that showed that the bears were slowing down. The timing of this observation was particularly noteworthy because AVAX was trading in a wedge pattern underpinned by descending resistance and ascending support. The pullback recently triggered a support retest.
AVAX’s RSI was also seen hovering just below the 50% level while the MFI confirmed the sell pressure slowdown. Although the support retest and other price chart observations suggested that a pivot was on the way, on-chain volumes indicated that there was low confidence among investors.
The weighted sentiment also declined significantly in the last few days, in tandem with the price decline. This could be taken as confirmation of low confidence in the bulls. AVAX’s on-chain volume also dropped to its lowest weekly level on 23 April.
There was a slight volume increase in the last 24 hours which suggested that there was some buying pressure. This may have neutralized some of the buying pressure but was not enough to trigger a significant pivot.
AVAX’s market cap gained roughly $200 million at the time of writing. It also lost a substantial amount of that gained market cap, indicating a tug-of-war between the bulls and the bears.
In summary, AVAX’s price action demonstrates uncertainty and low confidence in the bulls. This meant that there stood the possibility that AVAX can still extend its downside and break through the current support level if the bulls fail to rise to the occasion.