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The price of Avalanche [AVAX] has dropped 14.05% in the past 24 hours, and the weekly decline has expanded to 29.12%. Despite this bearish trend, a shift in market sentiment may be imminent.
According to AMBCrypto, whale activity appears to be intensifying, which could propel AVAX into a new market phase.
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The increase in the number of addresses indicates growing market interest
As both active addresses (AA) and new addresses (NA) have surged, market interest in AVAX is on the rise.
Over the past seven days, AA has increased by 44.50%, indicating an increase in trading volume among existing participants. Meanwhile, NA has soared by 142.90%, suggesting that the adoption of AVAX is steadily increasing, likely due to new entrants finding the asset attractive.
The combination of increased market participation and the influx of new addresses is a bullish indicator, suggesting that the market may be poised for an upward trend.
According to AMBCrypto, large holders or "whales" may be driving this growth by accumulating AVAX worth hundreds of millions of dollars, leading to a surge in activity.
Whales are accumulating AVAX
The purchase volume of AVAX has increased significantly across all address categories, particularly for addresses holding between $1 million and $10 million worth of AVAX in the past 7 days.
During this period, the number of addresses in this range grew by 24.08%, indicating that whales are gradually entering the market.
Similar growth trends were observed in other categories as well: addresses holding between $100,000 and $1 million in AVAX grew by 20.13%, while those holding between $10,000 and $100,000 grew by 23.56%.
The collective accumulation by large traders suggests a positive outlook. When the market sentiment of these key participants is aligned, it typically indicates a healthy buying trend, which could drive the token price higher from the current level.
The supply of AVAX is gradually decreasing
The available money supply in the market is steadily declining, with a significant drop in net outflows from exchanges.
In the past 24 hours alone, $9.61 million worth of AVAX has been withdrawn from exchanges, bringing the weekly net outflow to $69.21 million - the highest level since April 4, 2022.
Meanwhile, the weighted funding rate of open interest contracts has returned to positive territory, indicating that mature traders are preparing for a potential rebound.
If the market sentiment decisively turns bullish, AVAX may experience a significant price surge, recovering from the past few weeks of decline.
