Avalanche Whales Offload Millions as AVAX Price Nears $50 -What Next?

Insights:

• Avalanche (AVAX) price retested $43 on Saturday, Dec 16, as it scored double-digit gains for the third consecutive week running. 
• Worryingly, the on-chain data trail reveals that Avalanche whale investors have spent the past week offloading AVAX on retail holders. 
• Relative Strength Index (RSI) suggests AVAX price momentum is now in extreme overheated territory, as it approaches the critical $45 resistance. 

Avalanche (AVAX) price rocketed above $43 on Saturday, Dec 16, bringing its weekly gains to 30%. This marks the third consecutive week running that AVAX price has claimed double-digit gains. 

While the momentum remains bullish in the AVAX spot markets, the on-chain data trail reveals that Avalanche whale investors have started selling.  Will the retail investors hold firm or succumb to the bearish pressure? 

Avalanche Whales Quietly Offloaded $6.8M after Price Crossed $40 

Avalanche has emerged as the best-performing Layer-1 altcoin in the top 20 crypto market ranking for the second week running. In fact, AVAX price has now increased by a whopping 110% between Dec 1 and Dec 16. It has skyrocketed from $21 to hit $44 for the first time since May 2022. 

But worryingly, as the Avalanche price now approaches euphoric peaks, on-chain data trail reveals that whale investors have started booking profits this week. 

According to the latest data readings from IntoTheBlock, AVAX Large holder net-flow decreased significantly this week, despite AVAX price rallying 30%. As seen below, Avalanche whales tuned down their buying pressure, just as AVAX price crossed the $30 mark around Dec 8.

Once the price crossed $40 on Dec 15, the whales’ net-flow flipped negative as they collectively sold-off 156,560 AVAX coins within 24 hours. 

Large Holder Net-flow is a financial on-chain metric that compares the daily inflows and outflows, from wallets holding at least 0.1% of the  circulation supply.

Valued at the current price of $44, the AVAX whales have capitalized on the recent price rally to book profits $7 million in the last 48 hours. A sudden selling trend among corporate entities and high net-worth investors often puts downard pressure on a cryptocurrency’s price for a few reasons. 

Important, when crypto whales offload large quantities of coins within a short period as observed above, it dilutes market supply. If the retail traders cannot match this added supply with a comparable level of fresh demand, AVAX price stands the risk of a major correction in the days ahead. 

Forecast: Can AVAX Price Reach $50 

AVAX price looks set to reclaim the $50 territory in the short-term. But from an on-chain perspective, corporate investors offloading AVAX could trigger a monetary price correction. 

With their superior financial muscle, if Avalanche whales keep selling for a prolong period of time, the retail bulls could soon succumb to the bearish pressure. 

Technical indicators also confirm this potentially bearish outlook. Firstly, the Relative Strength Index (RSI) is currently trending in 90.88, which implies an extremely overheard market. 

Secondly, the upper Bollinger Band indicator, shows that AVAX price as now approaching a potential reversal point at $45. If the whales keep selling, AVAX bulls could find it difficult to scale that resistance zone. 

If this scenario plays out, Avalanche investors can anticipate a price correction in the coming days. 

On the flip side, the bulls could invalidate that negative price forecast if AVAX price can breakout decisively above $45. However, given the overheated status of the market, a short-term bearish reversal looks more likely.