Avalanche has been going up the chart ladder since the start of the year, following the broader crypto market rally as major cryptocurrencies break through crucial resistances. But right now, its native token AVAX seems to have found itself a new ceiling.
According to Coingecko, AVAX is down 10% in the daily time frame, landing it a spot as one of the bigger losers as of today, January 25th. This has led to speculation that Avalanche’s most recent rally that was triggered by partnerships with Amazon Web Services and with Alibaba was just a so-called “buy the rumor, sell the news” event.
The saying “buy the rumor, sell the news” describes a common trading technique in which investors buy a security on the basis of rumors about an impending news announcement or data, and then sell the asset once the news is out.
This could afford the trader an opportunity to purchase the security before everyone else does so that he or she can sell it at a profit when demand and price rise.
Image: CoinCentral
External And Internal Forces Influence AVAX
Although developments on-chain have been particularly bullish, external market forces seem to be the dominant force for the token’s slippage today. At the time of writing, Bitcoin and Ethereum have approached their respective resistances with no breakthroughs made by the two cryptos’ bulls.
But with recent developments like the ecosystem’s partnership with Canadian e-commerce company Shopify, we might see Avalanche become more mainstream as consumers from Shopify familiarize themselves with the ecosystem.
However, recent news shows that on-chain metrics have not improved since the announcement of the partnerships. Validator count still hovers around 1,200 ever since. The realm of DeFi also does not show promise for Avalanche.
Image: DefiLlama
According to DefiLlama, the ecosystem’s total value locked declined 3% since yesterday. This can be a sign of a slight loss in investor confidence as investors would have felt misled by the recent market movements.
At $16.96, What’s In Store For Investors?
Investors are somewhat bearish because of the recent rejection at $19. According to CoinGlass data, short sellers out-number the long buyers by a significant margin, adding to the overall bearish weight of the situation.
Image: Coinglass
If the token continues to do worse and closes today below $16.85, we might see the bears retest the $15.74 support range. However, on-chain developments…
Click Here to Read the Full Original Article at NewsBTC…
