Key Takeaways:
- AVAX lost nearly 90% of its value during Q2 and could face another 50% selloff.
- Messari report argues that Avalanche network stood the test.
- Non-custodial wallet Core and the enabled native Bitcoin support could favor the bulls in the long-haul.
YEREVAN (CoinChapter.com) – Avalanche (AVAX) shaved 88% off its value throughout Q2 and stood at just over $18 on July 11. However, technicals point to another 50-60% drop, pinning the target value at approximately $7.
AVAX bearish technicals
AVAX has formed a series of Symmetrical Triangles since mid-May, best visible on the four-hour chart. A Symmetrical Triangle features a period of consolidation between two converging trendlines with a similar slope that lowers the price swing before continuing on a bearish path.
Each triangle resulted in a leg down equal to the maximum distance between the trendlines. Following the setup, AVAX could half its value and drop to $7.3.
Additionally, the trading volumes on the four-hour chart have declined since July 8. In detail, weakening trading volumes signal growing passivity among investors. Typically, it indicates a looming value drop.
However, despite bearish technicals, Avalanche closed the quarter with core developments.
Avalanche Q2 results
The network stepped into Q3 with a key development up its sleeve, says on-chain data provider Messari. Avalanch launched ‘Core,’ a non-custodial wallet explicitly created for applications on the network with native support for subnets.
Additionally, the protocol enabled native Bitcoin support, allowing BTC holders to transfer their BTC onto Avalanche securely.
Avalanche indeed felt the macroeconomic environment as we saw declines in financial metrics and network usage. […]Ultimately, while macro forces impacted Avalanche’s valuation and network activity, the strategies to continue expanding the network were effective throughout Q2.
read the report.
Also read: Avalanche down by nearly 25% as Terra faces tax evasion charges — what's the connection?
Notably, Avalanche experienced declines in network usage and financial performance compared to the prior quarter and for the first time in over a year.
What to expect?
Messari also stated that despite the downtrend trend over Q2, daily active addresses stabilized at around 42,000 per day on average during June. The noted activity level was “exponentially greater” compared to the year prior.
Moreover, the network averaged around 92,000 daily active addresses during Q1 and reached a stable range with an average of 63,000 during Q2.
Also read: Avalanche's incredible network growth does little in limiting AVAX price's 40% crash risks.
While Avalanche suffered heavy losses throughout the previous quarter, Messari estimated its fundamentals to be strong. However, bearish technicals point to a selloff continuation. The upcoming sessions will show if the short-term prediction pans out.
