AVAX plunges by 4%, but short sellers could benefit from this silver lining

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

  • At the time of writing, AVAX was in a position beset by bears.
  • A break above $11.93 could invalidate the aforementioned forecast

avalanche [AVAX] it has been trending lower since late August, exposing long-term holders to losses. At press time, it was trading at $11.44 and was threatening to break below its recent trading range of $11.16 – $11.93.

AVAX fell below $11.78 when Bitcoin [BTC] it fell below $16.88K. Previous sensitivity to BTC performance could complicate AVAX uptrend if BTC is bearish, making it worth investor watch list.

Given AVAX’s bearish structure at press time, bears could drive its price beyond these key levels.

Read avalanches [AVAX] price prediction 2023-24

Will a breakout of this trading range occur?

Source: AVAX/USDT on TradingView

AVAX traded in the range of $11.16 – $11.93 since December 19. Additionally, AVAX also faced several price rejections at $11.93, blocking any recent recovery attempts. There was a pullback in price at press time, which could break below $11.38 and settle at $11.16 or lower.

The Relative Strength Index (RSI) has been rejected several times at the 40 mark, which explains the price rejections at the $11.93 level. The RSI turned down, showing a drop in buying pressure as selling pressure increased.

In addition, the On Balance Volume (OBV) did not exceed the 136 million trading volume mark. Therefore, the buying pressure and the uptrend of AVAX have been limited by volume fluctuations.

Therefore, AVAX could likely fall to $11.16, offering short selling opportunities. Extremely bearish BTC could even send AVAX down to $10.40.

However, a break above the current hurdle and the price rejection level at $11.93 will invalidate the previous bearish forecast. In such a case, investors would want to watch if the RSI breaks above the 40 mark and the OBV breaks above 136 million to close their short positions.

How many AVAX can i get it for 1$?

AVAX Risk Profile: Monthly Sharpe Index Falls Below 1

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Source: Mesari

According to Messari, the AVAX Sharpe index was -1.63. This indicated that it was not a good investment compared to other risk-free or low-risk investments. For the close, the Sharpe Index tracks how well an asset performs compared to the rate of return on risk-free assets, such as US Treasuries.

A ratio greater than 1 can be considered good, while 3 or greater is considered excellent. Conversely, anything below 1 is considered a “not good” investment. In this case, AVAX’s -1.63 shows that its rate of return is much lower than other risk-free or risk-free investment options.

A deeper look at return on investment (ROI) was all red, reinforcing the extent to which both long- and short-term AVAX holders were taking losses.

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Source: Mesari