AVAX rises 2.62%: Smart money profits 375% still holding coins, retail investors start dumping

[Coin World] Avalanche [AVAX] recorded a rise of 2.62% in the past 24 hours, marking its first positive performance after a fall of 26.22% over the past month. Analysis shows that these gains stem from savvy investors reaping huge profits from early bets on AVAX. However, the key question remains: will this inspire new confidence or trigger selling?

Smart money profits but holds AVAX

According to analysis, although the price has generally fallen by 13%, savvy investors in AVAX have already made considerable profits. Here, “smart money” refers to those investors known for profitable bets, buying low and selling high. The report shows that during this period, these investors’ profits reached as high as 375%, with unrealized gains nearing $1 million, distributed across 11 positions. Typically, investors with such generous returns are expected to sell off their holdings and cash out. However, as of the time of writing, they are still continuing to hold their positions.

In contrast, retail investors are adopting different strategies, selling their assets.

Retail data shows a bearish tendency

According to data from the platform, retail investors have begun to cash out, taking advantage of the recent price rise. As of the time of writing, spot retail investors have reversed their buying behavior from the previous week (when they accumulated AVAX worth $11.9 million) and have now started to sell. In just the past 24 hours, these investors have sold AVAX worth $821,000, putting downward pressure on the price.

Similarly, derivatives retail traders have also started opening short positions, betting on the further fall of AVAX’s price.

This trend is confirmed by the open interest weighted funding rate. This indicator is used to analyze the sentiment of the derivatives market, indicating whether traders are buying or selling. Currently, this indicator has fallen into the negative territory, with a reading of -0.0022% after remaining in positive territory for the past few days. Both spot and derivatives retail investors hold a bearish stance, highlighting the prevalent negative sentiment in the AVAX market.

AVAX chart shows a breakout, but resistance remains.

On the chart, AVAX shows a bullish path as it breaks through the resistance level in the descending channel pattern. Typically, such a breakout could lead the price to return to the peak of its breakout channel, providing traders with significant gains. However, the increasing selling pressure may make this move increasingly difficult.

In addition, the key resistance level is right ahead. If the price can break through the first resistance level, it may indicate that the bullish trend is still intact. Nevertheless, another major obstacle is at $19.81. Exceeding this level could push the price up to the $22 range, which means a 27% rise from the initial breakout point.

The market shows neutral sentiment.

As of the time of writing, the total locked value (TVL) remains stagnant, with no significant inflow or outflow shown in the past 24 hours. The current market behavior reflects investors’ indecision, which could impact the overall momentum of AVAX. As broader sentiment turns negative, AVAX may face potential pullbacks, challenging the strength of its recent rise.