At the time of writing, the popular Ethereum competitor is trading at $31.5, and BTC is hovering at $67,430. AVAX price has stabilized at $31.5 during many instances of heavy selling, but will it do the same again? Let’s discuss the current outlook for AVAX price just hours before the Fed meeting.
Avalanche (AVAX)
In the past week, the price has dropped nearly 9%, and the funding rate in futures indicates that investors expect further declines. You can easily detect sentiment by measuring the ratio of long to short positions. If the result is above 1, it means investors taking long positions are dominant. In the opposite scenario, the bearish view has strong support. According to Coinglass data at the time of writing, this ratio is at 0.79.
On June 7, when AVAX was still above $35, the open interest in futures was significantly higher. Now it has fallen to $211 million, and a significant portion of investors have closed their positions due to concerns about the risk of decline.
When dominant short positions and the decline in open interest are read together with the $31.5 price, it is wise for investors to be cautious for the Fed evening. Depending on the upcoming inflation data, investors will see increased volatility. Hours later, Fed members will announce their 3-year interest rate expectations, and half an hour later, Powell will take the microphone. Volatility will increase exponentially.
AVAX Price Prediction
So, what are the potential targets for AVAX as volatility increases? Closing below $31.5 could lead to a test of $29.38. The DMI indicator confirms the dominance of sellers. ADX also supports the bearish predictions.
Now let’s look at the chart we’ve been following since December 2023. The price has fallen back to the parallel channel support and has done so for the fourth time since mid-April. Testing a support level this many times means the likelihood of a downward break increases.
If the pessimistic scenario occurs, gradual dips down to the $19 base where the rally started can be seen with a possible intermediate stop around $27.
