Top 3 Trending Coins: AVAX Testing Key Support near $22, ADA Pivots 50DMA Pre-Key Macro Events

Key Points

• Avalanche is the worst performing top 20 coin and has fallen back to test the key $22.0 support area.
• Cardano is trading near its 50DMA at $0.49 as it awaits updates on the Vasil hard fork upgrade this week.
• Axie Infinity’s AXS is the worst performing top 50 coin, but remains above its 21 and 50DMAs for now.

Avalanche (AVAX) Tests Key Support at $22.0

AVAX, the native token of the Avalanche blockchain, fell back to test a key level of resistance on Monday, weighed amid a broad pullback in cryptocurrency markets as traders de-risk ahead of key macro events later in the week that could seriously shake things up. AVAX/USD was last changing hands just below the $22.0 level, almost bang on a key level of support-turned-resistance from May through to July.

AVAX is trading about 8.0% lower on Monday versus its Sunday close around $23.80 and is down over 8.0% in the last 24 hours, as per CoinMarketCap. That makes it the worst performing cryptocurrency in the top 20 by market capitalization. To the downside, bears will be eyeing a test of the 21-Day Moving Average just under $21.00.

But ahead of key macro events this week, it would make sense for AVAX to continue to pivot close to the key $22.0 area. Various mega-cap US stocks like Apple, Amazon, Microsoft and Alphabet (Google’s parent company) will be reporting earnings through the middle of the week and this could have a big impact on equity market sentiment. Crypto has maintained a close correlation to stocks in recent quarters.

Meanwhile, the Fed is expected to lift interest rates by 75 bps for a second successive meeting on Wednesday. Fed Chair Jerome Powell’s tone on the economy and outlook for rate hikes will be the main factor scrutinized by traders, with markets having already priced in the 75 bps move. Given recent signs that core price pressures in the US have peaked, that inflation expectations have moved lower towards the Fed’s 2.0% target recently and in light of recent ugly economic data (like last Friday’s recessionary PMI survey results), some hope the Fed might give off a slightly more dovish message.

If that were to be the case, it could support risk appetite and a crypto rebound. Elsewhere, US GDP growth figures for Q2 are out on Thursday and will confirm whether or not the US economy entered a technical recession in H1 2022. If macro events this week go badly, this could weigh heavily on crypto. A sustained break below $22.0 would open the door to a run lower towards support in the $16 area.

Cardano (ADA) Awaiting Vasil Hard Fork Update Announcement

ADA, the native token on the Cardano blockchain, was last trading nearly bang on the $0.49 level, having slipped back from weekend highs in the $0.53s. However, the cryptocurrency remains well within recent $0.47 to $0.55ish ranges and continues to trade close to its 50-Day Moving Average just under $0.49.

As well as upcoming macro events, ADA traders are also on the lookout for updates regarding the highly anticipated Vasil hard fork upgrade to the Cardano blockchain that is expected prior to the end of the month. The update was originally scheduled for late-June but got delayed by at least one month, and some think another delay could be forthcoming.

Cardano’s developers say that the upcoming upgrade is the most complex program of development and integration on Cardano since its Alonzo hardfork added smart contract functionality to the blockchain back in September 2021. The Vasil hardfork aims to improve the network’s speed and scalability by reducing transaction size and, as a result, increasing the network’s throughput whilst also lowering transaction fees on the network.

In terms of ADA/USD technicals, things are still looking upbeat for the cryptocurrency. This time last week, ADA broke above a downtrend that had been capping it since mid-June. Should support in the $0.47s go, the cryptocurrency would quickly test its 21DMA at $0.47 then might even drop as low as $0.45. But a drop to this area might attract buyers looking to target a move back to recent highs in the $0.55 area.

Axie Infinity (AXS)

Since posting multi-week highs close to $19.0 per token on Sunday, AXS, the native cryptocurrency of the play-to-earn game Axie Infinity has reversed over 15% lower. At current levels in the $15.80s, AXS is over 9.0% lower in the last 24 hours, making it the worst performing top 50 cryptocurrency.

AXS/USD is eyeing a retest of its 50 and 21DMAs in the low-$15.0s. Despite the recent pullback, AXS remains in the top half of its recent $12 to the upper-$18.0s range. So long as broader crypto risk appetite continues to improve, which will rely very much on this week’s macro events turning out favorably, then AXS can remain support near recent highs. The fact that it, for now, remains above its 21 and 50DMAs is a good sign that a bounce back towards $19.0 remains possible.