Avalanche (AVAX) Shows Signs of Promise, Long Term Outlooks Signals Bullishness

Avalanche (AVAX) looks like it is trying to overcome some of its weakness into Monday after a volatile round of trading over the weekend when it made some gains, and despite its bullish long term outlook, remains in the bear territory amid the heightened uncertainty weighing on the wider crypto sector lately. At the time of writing, AVAX/USD is trading at around $88.13.

The market sentiment has been one of the biggest drivers in cryptocurrencies, keeping them trading under pressure as investors anticipate the Fed to announce a rate hike soon. This move by the US central bank to tackle soaring inflation could weaken the appeal of digital assets which had surged in popularity in recent months as a hedge against inflation. In addition, regulatory concerns from around the world have also kept traders bearish about digital currencies, hurting leaders like Bitcoin and Ethereum as well as altcoins such as Avalanche.

It is facing further pressure to the downside after analysis shows that one of its rivals Fantom (FTM) saw its daily transaction volume exceed that of Avalanche as well as leader Ethereum. One of the key strengths the blockchain offers is in the world of DeFi, where it is poised to give Ethereum quite the competition, but numbers reveal another rival overtaking it and denting its prospects in the space. While most other blockchains saw their DeFi TVL shrink over the past week, Avalanche was one of the few ecosystems which actually saw its DeFi TVL increase during the period.

On the fundamentals front, the AVAX token can enjoy support in the long term over several interesting developments expected through the year. But in the near term, we could be in for more bearish moves until investor confidence in cryptocurrencies rebounds. One of the biggest drivers that can keep AVAX in favor among investors is the growing ecosystem of dApps which has already exceeded 500 till date owing to its EVM-compatible.

AVAX/USD Technical Analysis

According to analysts at JPMorgan, Ethereum’s market share in the DeFi space is expected to come down this year owing to rising popularity of other alternatives, especially Avalanche. This report gives further reasons to be optimistic about AVAX’s prospects as an investment in the future.

Taking a look at the H4 chart of AVAX/USD, we find a bearish bias among most of the moving averages. Although, the popular technical indicators MACD and momentum suggest some buying interest as well.

Avalanche’s price remains under the pivot point at $94.22 although it is holding comfortably above the immediate support at $74.31. Let’s see if we can find an uptick of buyers in the market to take AVAX past the pivot point soon.