Key takeaways
Why is AVAX down?
Avalanche fell 5% in the last 24 hours, matching the correction seen in crypto markets.
Can the activity cause a reversal?
The increase in on-chain activity suggests a potential rebound in price action.
Avalanche (AVAX) has recently attracted public attention, as evidenced by increased on-chain activity. However, its price has fallen more than 5% in the past 24 hours, at press time, extending to a 7% drop over the week.
This pullback aligns with the broader crypto market correction following last week’s bullish momentum. The decline notably generated significant support, suggesting possible signs of a reversal.
The whales are piling up!
According to Arkham data, a whale purchased around 200,000 AVAX valued at around $6 million in the last 24 hours. The activity indicated classic informed money accumulation behavior during periods of market strength.
At the same time, another whale transferred about $12 million in a Coinbase wallet.
Source: Arkham
Additionally, activity on the blockchain was also on the rise.
A booming chain business
On-chain data from DefiLlama revealed that the altcoin saw a $200 million increase in trading volume, at the time of writing, taking its cumulative volume past $950 billion.
Decentralized exchange (DEX) activity accounted for almost 33% of total daily volume. Token liquidity stood at approximately $3.74 million, including user rewards.
Source: DéfiLlama
Development activity continues to grow, which contributes to the bullish sentiment.
The number of smart contracts on the Avalanche ecosystem has more than tripled over the past year. At press time, the cumulative number of contracts stood at more than 44 million.
The total AVAX burned reached 4.8 million, reducing supply. The average burn rate has been 1,250 tokens per day since mid-July.
More activity is expected as the Avalanche blockchain will host FIFA NFT tokens for the 2026 World Cup using AvaCloud. As reported by CoinMarketCap, this would power real-world programs.
Will the altcoin reverse the price decline?
On the charts, AVAX had fallen below a narrowing ascending wedge trend. The altcoin confirmed the fall with a high just below the breakout level.
On the four-hour chart, AVAX price was stabilizing around the 0.75 Fibonacci retracement level. This was after falling below the 200 exponential moving average (EMA).
Reclaiming the 200 EMA as support would confirm the reversal. Nonetheless, if the current level holds, this could be a great area to go long as it aligns with the Fib level known to trigger reversals.
However, it was not clear.
Source: TradingView
Alternatively, AVAX could drop to $26 to retest the previously broken range top. Since mid-September, the altcoin has been trading in a range between $22 and $26.
Right now, AVAX is in a state of indecision, especially when considering the broader market context.
Still, on-chain metrics and technical indicators are starting to show early signs of a potential reversal.
