After making a big splash over the past few weeks, Avalanche (AVAX) prices are on the slide, losing almost 13% of value over the past 24 hours even though they have gained over 31% in the past week. At the time of writing, AVAX/USD is trading at around $42.92.
The moves lower could be the result of a weakness in the investor sentiment towards cryptocurrencies in general at the moment. The mood has cooled off after running high for the past several sessions after market leader Bitcoin dipped below the $50,000 mark and has been unable to reclaim this level this week.
In a matter of one month, the total value locked (TVL) within the Avalanche ecosystem has surged from $180 million to almost $1.8 billion. Powering the rise is DeFi protocol Benqi with a TVL of just over $1 billion touched in less than one week since its launch on the network.
Although Avalanche’s mainnet was launched in September 2020, it was initially met with a lukewarm response. However, interest in it started to pick up late last month ever since Chainlink oracles went live and offered pricing data infrastructure that could power the launch of lending platforms like Benqi.
Ever since the announcement of its liquidity mining incentive program Avalanche Rush, the blockchain has been garnering higher levels of interest from several key players in the DeFi segment – from SushiSwap and Aave to Curve and Pangolin. With the interest in the DeFi space continuing to soar, the AVAX token could see its value rise even higher, although it may face some price corrections along the way.
Key Levels to Watch
Technical analysis of the 4-hour chart of AVAX/USD reveals a bearish bias among the smaller timeframe moving averages (red, yellow) as well as leading technical indicators MACD and momentum. Although, the larger timeframe MAs suggest some buying interest as well.
The key level to watch is the pivot point at $37.46, and although the price is holding above this currently, further selling pressure can lead it towards this point. In case more sellers jump into the market, we could see Avalanche’s price head lower, in which case it’s best to monitor the immediate support at $24.61.