‘Exhausted’ AVAX may not follow the general trend; Instead, here’s what’s up

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The first half of August brought good tid­ings for AVAX hold­ers, as has been the case for most cryp­tocur­ren­cies. How­ev­er, the mar­ket is now about to enter the sec­ond half of the month, with AVAX already show­ing signs of a poten­tial pullback.

AVAX’s bulls demon­strat­ed strong momen­tum in the first week of August. How­ev­er, the sec­ond week just con­clud­ed with a notable decline in momen­tum. Any upside over the last few days was also met with some resis­tance, espe­cial­ly near the $30-price range.

Exhausted bulls?

AVAX’s lat­est per­for­mance is not sur­pris­ing. Espe­cial­ly since this is because the resis­tance lev­el seemed to be man­i­fest­ing after it recent­ly retest­ed its ascend­ing sup­port line.

The lat­ter is part of the ascend­ing chan­nel in which AVAX has been trad­ing, after bot­tom­ing out near mid-June.

Source: Trad­ingView

The trend line is not the only sign of a poten­tial retrace­ment. It also turns out that AVAX’s ral­ly briefly pushed it into over­bought ter­ri­to­ry, accord­ing to the RSI. In fact, it has been hov­er­ing near the over­bought zone since, with the bulls attempt­ing to push up further.

These bear­ish expec­ta­tions can be backed by a drop in vol­ume ever since AVAX entered its press time resis­tance zone. This obser­va­tion seemed to align with the weak­er bull­ish momen­tum seen over the afore­men­tioned period.

Source: San­ti­ment

In addi­tion, investor sen­ti­ment reg­is­tered a notable change this past week. This change was picked up by the FTX fund­ing rate, which dropped sub­stan­tial­ly after hit­ting a month­ly peak last week. This con­firmed that investors in the deriv­a­tives mar­ket are cur­rent­ly less opti­mistic about the bulls.

AVAX’s weight­ed sen­ti­ment has also dropped slight­ly since 9 August. A con­fir­ma­tion that the sen­ti­ment is no longer pre­dom­i­nant­ly bull­ish. In fact, at press time, it was in the neg­a­tive zone, con­firm­ing that many investors expect a reversal.

Source: San­ti­ment

Exploring all possible outcomes?

If the mar­ket can main­tain its upside, chances are that AVAX might retain its press time range. How­ev­er, the pre­vail­ing sen­ti­ment means it might not man­age more upside with­out encoun­ter­ing sig­nif­i­cant sell pressure.

On the oth­er hand, this is the third time that AVAX is retest­ing the resis­tance line. This is con­fir­ma­tion that the press time north­bound price chan­nel is grow­ing stronger. In oth­er words, investors should watch out for a poten­tial break­out, espe­cial­ly if the next bull­ish wave returns with more momentum.

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