Avalanche Price Soars 20% After Report Reveals $25M Inflow Into AVAX Investment Vehicles

Avalanches (AVAX) has rallied around 20% in the last two days, as a new report has revealed millions of dollars inflow of AVAX-based investment products.

Produced by CoinShares, an institutional cryptocurrency fund manager, the report highlighted that Avalanche-based investment vehicles attracted some $25 million in the week ending February 21, the second largest inflow on record in that period after the USD 89 million of Bitcoin (BTC).

Asset flow. Source: Bloomberg and CoinShares

In contrast, Ether (ETH), Avalanche’s main rival in the smart contract sector, recorded an outflow of $15 million. Overall, Avalanche and similar cryptocurrency investment products attracted some $109 million, posting their fifth straight week of positive numbers.

AVAX Bounces Against Macroeconomic Headwinds

Interestingly, the capital infusion came despite headwinds to riskier assets, led by the ongoing conflict between Russia and Ukraine, which has injected fear into traditional and crypto markets.

As a note of caution, CoinShares also stressed that the inflows into Avalanche investment vehicles should not be treated as a sign of a “broader altcoin appetite.” However, the price of AVAX rose after the firm’s report was made public on February 22.

Avalanche rose to $82.50 from $67 on Feb 22-23, marking a paper gain of around 22% and re-entering the top ten largest cryptocurrencies by market cap. By comparison, Bitcoin and Ether are up as much as 8% and around 10.5% in the same period.

AVAS/USD 4-hour chart. Source: TradingView

Nonetheless, the AVAX recovery trend showed signs of exhaustion after hitting $80 as resistance, as shown in the chart above.

Technical setup from here on out

The latest buying spree in the Avalanche market also came as AVAX tested its 200-day exponential moving average (EMA-200; the blue wave) as support. Meanwhile, the red zone, which served as the capitulation zone in September-October 2021, offered additional floor for investors to accumulate, as shown in the chart below.

Daily chart of the AVAX/USD pair. Source: TradingView

Conversely, AVAX suffered a minor pullback after testing its 50 day EMA (the red wave) as resistance. The move left the price trapped between the 50 day EMA and the 200 day EMA, indicating a short-term bias conflict between bulls and bears.

But from a broader perspective, AVAX has been trending lower since topping out near $150 in November 2021, in a parallel descending channel. Therefore, even a move above the 50 day EMA would see the Avalanche token facing downside risks near the upper trend line of the channel.

Similarly, a sharp pullback below the current support provided by the 200 day EMA could increase the potential for AVAX to drop towards the lower trendline of the channel roughly below $40.

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