Avalanche (AVAX) Price Downtrend Continues After Stars Arena Hack
The price of Avalanche (AVAX) has been on a downtrend since October 7 when Stars Arena suffered a hack. This decline also confirmed the $10.50 horizontal area as resistance in the long term.
Avalanche Fails to Clear Horizontal Resistance
Looking at the technical analysis from the weekly timeframe, it is evident that AVAX failed to sustain its increase last week. Although it briefly reached a high of $11.88, it couldn’t close above the crucial $10.50 horizontal resistance area. Instead, it formed a long upper wick and dropped below this level.
The $10.50 area is significant as AVAX has traded above it since 2021. After falling below it in August, AVAX attempted to reclaim it last week but was unsuccessful. The area is now confirmed as resistance.
Stars Arena Hack Affects AVAX Price
The previous price increase in Avalanche can be attributed to the introduction of Stars Arena, a SocialFi platform built on the Avalanche blockchain. However, Stars Arena was hacked on October 7, which may have triggered the ongoing AVAX price downtrend. The team has since recovered 90% of the funds after reaching an agreement with the attacker.
This incident cost the team 27,610 AVAX, equivalent to $252,000 at the current price. A new smart contract has been implemented to prevent similar attacks.
AVAX Price Prediction: Bearish RSI Indicates More Downside
The weekly Relative Strength Index (RSI) supports the continuation of the price decrease. Traders use the RSI as a momentum indicator to identify overbought or oversold conditions and make trading decisions.
A reading below 50 and a downward trend suggest a bearish trend, and currently, AVAX’s RSI is below 50 and moving downwards. If the decline continues, the closest support level will be at $4.40.
Hot Take: AVAX Price Outlook
Despite the bearish indicators, some traders believe that the relaunch of Stars Arena can act as a catalyst for new long positions in anticipation of reclaiming the $10.50 resistance level. However, if AVAX manages to reclaim this level, it could lead to a significant 125% increase towards the next resistance at $20.50.
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