Avalanche sees record-breaking spot fund inflows, why isn't the price rising?

▲ Avalanche (AVAX)/ChatGPT generated image ©

Despite the strong positive news of record-breaking spot (physical) fund inflows, Avalanche (AVAX) has been unable to break through technical resistance levels and continues its bearish trend, constrained by geopolitical tensions in the Middle East and mixed investor sentiment in the derivatives market.

According to investment media FXStreet on April 28 (local time), the Avalanche Spot Exchange Traded Fund (ETF) recorded its largest single-day net inflow since its launch on Monday, reaching a remarkable $8.75 million. Despite this massive influx of institutional funds, as shown by SoSoValue data, the macro-economic risk-off sentiment, exacerbated by uncertainty between the US and Iran, is weighing down 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 on Tuesday fell to a one-month low of 0.74, indicating a dominance of short-selling positions betting on a decline. Conversely, the open interest weighted funding rate turned positive, recording 0.0115% on Tuesday, suggesting that bullish sentiment where long positions pay short positions also coexists, indicating strong wait-and-see sentiment 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 barriers above it. The Relative Strength Index (RSI) on the daily chart hovers around 48, indicating 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, drawn from the January high to the February low. If this is surpassed, Avalanche must break through the 50-day exponential moving average at $9.40, and the 100-day exponential moving average and 38.2% Fibonacci retracement zone located just above $10.00. Conversely, if downward pressure intensifies, the initial support level is expected to be the ascending trendline near $8.97, and if even this collapses, buyers must defend at the strong horizontal support level of $8.39 to prevent a deeper fall.

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