Avalanche price prediction: Will $5.94 support hold as AVAX drops 6.98%?

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Avalanche slides 6.98% to $6.12 today

Highlights

Institutional demand for AVAX remains muted as spot ETF activity has been stagnant since June 11, hindering broader inflows.
While September's Avalanche Summit in New York presents potential for ecosystem growth, persistent selling pressure overshadows longer-term optimism.
AVAX/USD trades below key technical levels with bearish momentum, expected to range between $5.94 and $6.3 with high downside probability.

Institutional inactivity and summit anticipation shape AVAX sentiment

AVAX spot Exchange-Traded Funds have remained largely inactive since June 11, restricting institutional inflows and highlighting a subdued appetite from larger market participants, according to Fxstreet. This lack of activity in ETF markets diminishes liquidity and broader exposure for Avalanche, which can dampen near-term sentiment. Meanwhile, the upcoming Avalanche Summit scheduled for September in New York, with monitored partnership and ecosystem developments as reported by Tronweekly, introduces potential for longer-term network growth, though price action has remained under broader selling pressure.

Bearish momentum dominates as resistance holds and signals diverge

On the hourly chart, AVAX is trading below the 20-period moving average at $6.18 and the 50-period moving average at $6.3, as well as well beneath the 200-period moving average on the daily chart at $9.96. The Ichimoku Kijun sits at $6.3, acting as immediate resistance. Momentum signals remain predominantly bearish: the Moving Average Convergence Divergence (MACD) is in Sell mode, Average Directional Index (ADX) is Neutral, Relative Strength Index (RSI) is at 43.64, Commodity Channel Index (CCI) and Bull/Bear Power are both in Sell mode, and the Awesome Oscillator also shows a Sell reading. Stochastic RSI offers a divergence, displaying a Buy signal despite overall negative momentum.

Sideways consolidation favored amid high risk of support breach

Over the next two to three trading days, AVAX/USD is expected to consolidate between $5.94 and $6.3, reflecting typical volatility relative to current levels. The likelihood of a decisive upward move is rated very low, while a break below support at $5.94 carries a high probability. A sideways scenario remains the baseline unless price action breaches immediate resistance at $6.3 or closes below key support.

Viktoras Karapetjanc, expert at Traders Union, notes that institutional demand for AVAX remains lackluster, as demonstrated by the inactivity in spot ETFs. He believes this restricts capital inflows and weighs on sentiment in the short term. However, anticipation for the September Avalanche Summit could provide a sentiment boost as the event draws nearer. In the current environment, Karapetjanc sees a low probability of immediate upside as long as broader market pressure persists. "Unless we see renewed ETF interest or strong news from the ecosystem, I expect AVAX to remain range-bound with a defensive tone prevailing in the near term."

Earlier, analysts noted that Avalanche was experiencing sustained bearish momentum despite ecosystem and partnership developments. Current technical signals reinforce this outlook, making the $5.94 support level especially crucial for traders monitoring potential downside risk through the remainder of the week.

Source of Data: AVAX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.