Avalanche Sees Record Spot Fund Inflows, Why Can't Its Price Rise?

▲ Avalanche (AVAX)/ChatGPT generated image ©

Despite the strong positive news of unprecedented spot fund inflows, Avalanche (AVAX) has been hampered by the geopolitical crisis in the Middle East and conflicting investor sentiment in the derivatives market, failing to break through technical resistance and continuing its bearish trend.

According to FXStreet, an investment media outlet, on April 28 (local time), the Avalanche spot Exchange Traded Fund (ETF) recorded its largest daily net inflow since launch on Monday, a staggering $8.75 million. Despite this massive inflow of institutional funds, as shown by SoSoValue data, the macroeconomic risk-off sentiment, exacerbated by uncertainty between the United States and Iran, is weighing on the overall market and suppressing price increases.

In the derivatives market, extreme caution among traders continues, with mixed signals being observed. According to CoinGlass data, Avalanche's long/short ratio fell to 0.74 on Tuesday, its lowest in a month, indicating that short-selling positions betting on a decline are dominant. Conversely, the open interest-weighted funding rate turned positive, reaching 0.0115% on Tuesday, suggesting that bullish sentiment where long positions pay short positions also coexists, indicating a strong wait-and-see attitude with no clear direction.

Technical indicators also point to a weakening of upward momentum. Trading at $9.23 as of Tuesday, Avalanche is trapped below its 50-day exponential moving average (EMA) at $9.40, with the 100-day EMA at $10.27 and the 200-day EMA at $12.88 forming heavy resistance levels above it. The Relative Strength Index (RSI) on the daily chart hovers around 48, remaining at a neutral level, and the Moving Average Convergence Divergence (MACD) histogram has slightly slipped into negative territory, warning that buying momentum is fading amidst the overall bearish trend.

The primary resistance level for a rebound is the 23.6% Fibonacci retracement level at $9.29, which connects the January high and February low. Surpassing this would require breaking through the 50-day EMA at $9.40, and the 100-day EMA and 38.2% Fibonacci retracement zone positioned just above $10.00. Conversely, if downward pressure intensifies, the initial support level is expected to be the ascending trendline around $8.97. Should even this collapse, buyers would need to defend at the strong horizontal support level of $8.39 to prevent a deeper fall.

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