Avalanche (AVAX) is up about 20% in two days Bitcoin Magazine reported that $25 million in institutional capital has flowed into AVAX-based investment products. In contrast, Ethereum (ETH), Avalanche’s biggest rival in smart contracts, has seen $15 million in outflows. In total, Avalanche and similar crypto investment products have raised around $109 million, marking the fifth straight week of inflows.

Interestingly, the capital injection came despite macroeconomic difficulties for riskier assets, led by the ongoing conflict between Russia and Ukraine, which instilled fear in markets overall, crypto and traditional markets.

The inflow of funds into Avalanche’s investment vehicles should not be taken as a signal of “broader desirability.” However, AVAX price rose slightly after the company’s report was released on Feb. 22.

Avalanche has grown from $67 to $82.5 between February 22-23, posting a paper yield of around 22% and returning to the top 10 cryptocurrencies after capitalization. Meanwhile, bitcoin and ether are up 8% and around 10.5%, respectively, over the same period.

However, Avalanche’s rally is showing signs of exhaustion after testing the $80 resistance.

Technical outlook ahead

The recent buy in the Avalanche market came as AVAX tested the 200-day exponential moving average (blue wave) for support. Meanwhile, the red zone, which acts as the cut-off zone in September and October 2021, offers investors an additional floor for accumulation, as shown in the chart below.

AVAX/USD daily frame price chart | Source: TradingView

On the contrary, AVAX saw a minor pullback after testing the 50-day EMA (red wave) as resistance. This move is keeping the price stuck between the 50-day EMA and the 200-day EMA, which indicates a conflict between bulls and bears in the short-term.

But from a broader perspective, AVAX has been trending down in a parallel descending channel since reaching almost $150 in November 2021. Therefore, even a move above the 50-day EMA would expose AVAX to downside risk near the upper trendline of the channel.

Similarly, a strong pullback below the current 200-day EMA support may increase the likelihood of AVAX falling to the channel lower trendline by around $40.

On-Chain Warning

Avalanche was not socially effective. Despite having over 2 million addresses, the altcoin has a very low social presence, accounting for just 0.4%. This means that for every 1000 crypto-related searches, only 4 come up for Avalanche.

Avalanche Social Performance | Source: Santiment

Additionally, sentiment around the asset was not particularly buoyant, being negative for the third straight month.

Investor sentiment avalanche | Source: Santiment

Therefore, while price action may attract new investors, AVAX may need to improve its appeal to attract longer-term investments.

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