However, despite the dramatic recovery, AVAX is caught inside a larger falling range.
Avalanche (AVAX) has gained almost 20% in the previous two days following the revelation of millions of dollars coming into AVAX-based investment products.
The report, authored by CoinShares, an institutional crypto fund manager, noted that Avalanche-based investment vehicles attracted approximately $25 million in the week ending Feb. 21, the second-highest weekly inflow after Bitcoin’s (BTC) $89 million.
In comparison, Ether (ETH), Avalanche’s chief competitor in the smart contracts space, saw a $15 million outflow. Avalanche and similar cryptocurrency investment products collectively garnered approximately $109 million, marking its seventh consecutive week of positive inflows.
AVAX rebounds against macro headwinds
Interestingly, the capital influx occurred amid macroeconomic headwinds in riskier assets, headed by the current conflict between Russia and Ukraine, which has stoked concern in both traditional and crypto markets.
CoinShares added a cautionary note that inflows into Avalanche investment vehicles should not be interpreted as indicative of a “broader interest for the altcoin.” Nonetheless, AVAX’s price increased following the publication of the firm’s report on Feb. 22.
Between February 22 and 23, Avalanche increased to $82.50 from $67, recouping approximately 22% in paper profits and reentering the top 10 cryptocurrencies by market cap. By comparison, Bitcoin and Ether surged to approximately 8% and 10.5 percent, respectively, within the same period.
Nonetheless, as illustrated in the chart above, AVAX’s recovery trend showed signs of weariness following a test of $80 as resistance.
Technical outlook ahead
The most recent purchasing binge in the Avalanche market occurred as AVAX tested support at its 200-day exponential moving average (200-day EMA; blue wave). Meanwhile, as illustrated in the chart below, the red area, which functioned as a capitulation zone in September-October 2021, provided an extra floor for investors to accumulate.
AVAX, on the other hand, saw a slight pullback following a test of its 50-day exponential moving average (EMA) (the red wave) as resistance. The move imprisoned the price between the 50-day and 200-day exponential moving averages, indicating a short-term bias struggle between bulls and bears.
However, AVAX has been drifting lower in a parallel declining pattern since it peaked near $150 in November 2021. Thus, even a break above the 50-day exponential moving average would expose the Avalanche token to negative risks near the channel’s top trendline.
Similarly, a severe pullback below the 200-day EMA’s present support level could raise AVAX’s likelihood of falling towards the channel’s bottom trendline — roughly below $40.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
