Avalanche (AVAX) has blown hot and cold for the most part this year. But the coin could see a decisive bearish trend that could push it towards new 2022 lows in the coming days or weeks. Analysis to follow below but first, here are some of the facts to keep in mind:
Avalanche (AVAX) could face speculative bear pressure from short sellers in the coming days.
There is very limited upside potential right now for the coin.
At press time, AVAX was trading at around $71, down about 6% for the day.
Data Source: Tradingview
Avalanche (AVAX) – Why new 2022 lows are coming?
AVAX started the week on the front foot. As with most coins in the crypto market, the altcoin surged but that momentum appears to have died down. Instead, the coin remained sluggish over the week and is approaching a crucial supply zone that could trigger immense short-term short selling.
This is likely to push AVAX down towards $57, a loss of nearly 30%. This will also be the lowest the coin has been in 2022. The biggest challenge for AVAX is that there is a very little upward potential right now.
Much of the price action that we have seen in recent days has been largely pushed by short-term traders who are likely to lock in profits. However, if AVAX bulls can push the coin back above $90, we may see some strength. This remains highly unlikely considering the volatile conditions in the market.
Is AVAX a good buy now?
Well, it depends on your strategy. For short-sellers who want to bet against the coin, this would be the time to get in. But for longer-term investors, stay out for a week or so. It is likely that AVAX will retreat towards $57 or thereabout. You can then buy cheaply and hold for the long haul.