Smart Money investors have realized significant profits from AVAX and continue to hold their positions, greatly influencing retail investor sentiment.
Market participants are starting to exit positions; however, the price chart still shows potential signals for a price increase.
Avalanche [AVAX] recorded a 2.62% increase in the past 24 hours – marking the first price increase after a prolonged decline of 26.22% over nearly a month.
Analysis shows that this recovery comes from Smart Money investors taking huge profits from their initial bets on AVAX. However, the key question is: is this a reaffirmation signal of confidence or will it trigger a sell-off?
Smart Money profits while still holding AVAX.
Information from Nansen reveals that Smart Money investors in AVAX have realized significant profits, despite the cryptocurrency's price dropping 13% overall.
To clarify, Smart Money refers to professional investors with strategies to buy at low prices and sell at peaks, achieving optimal profits.
Source: Nansen
Reports indicate that these investors have recorded profits of up to 375% during this period, with unrealized profits nearing 1 million USD across 11 positions.
With such significant profits, they usually choose to take profit opportunities; however, currently, they are still holding their positions.
In contrast, retail investors tend to exit positions, reflecting a lack of consensus in the market.
Retail data signals a downward trend.
According to CoinGlass, retail investors have started to take profits, capitalizing on the recent price increase.
At the time of writing, retail spot investors have reversed from last week – when they accumulated 11.9 million USD in AVAX – and have started to sell.
Source: CoinGlass
In the past 24 hours, this group has sold AVAX worth 821K USD, creating downward pressure on the coin's price.
Similarly, retail derivatives traders are starting to open short positions, betting on the continued downward trend of AVAX.
This trend is confirmed through the Open Interest Weighted Funding Rate – a measure that analyzes sentiment in the derivatives market, reflecting whether investors are buying or selling.
Source: CoinGlass
Currently, this index has dipped into negative territory with a value of -0.0022%, after maintaining a positive level in previous days.
The pessimism of spot and derivative users reflects a prevailing sense of frustration in the AVAX market.
The AVAX chart signals a breakout, but resistance pressure still remains.
On the technical chart, AVAX shows signs of a price increase as it breaks through resistance in a descending channel pattern.
Typically, a breakout like this opens up opportunities for prices to run back to the channel peak – where significant profits for traders can be made.
Source: TradingView
However, increasing selling pressure could make upward momentum difficult to control. Additionally, many important resistance levels still lie ahead.
If the first resistance level is successfully broken, this is a positive sign for the continued upward trend.
Notably, a major resistance level is at 19.81 USD. Breaking this level would pave the way for AVAX to reach the 22 USD range, representing a 27% profit from the initial breakout point.
The market exhibits a neutral sentiment.
At this moment, the Total Value Locked (TVL) remains stable, with no significant inflows or outflows recorded in the past 24 hours.
Source: DeFiLlama
The current market sentiment reflects investor indecision, putting pressure on the overall upward momentum of AVAX.
In the context of the overall trend turning negative, AVAX is facing the risk of a correction, testing the sustainability of the previous upward momentum.
Source: https://tintucbitcoin.com/avalanche-giam-phat-821k-usd-avax/
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