Avalanche faces a potential short-term correction due to a bearish RSI divergence, but the broader uptrend remains bullish amid growing institutional adoption of its L1 network.
Summary
- AVAX price tested the critical $27 neckline resistance before pulling back to $25.
- A bearish RSI divergence suggests potential weakening momentum in the short term.
- The 20-day EMA, which contained the recent dip, will likely act as support during the correction.
- The broader uptrend is intact based on a bullish EMA/SMA crossover.
- Institutional adoption of Avalanche Layer 1 gained momentum with Grove Finance’s recent announcement to deploy $250 million in real-world assets on the network.
Avalanche (AVAX) price has just tested the $27 neckline of a double bottom on the daily chart, reaching an intraday high of $27.40 before facing rejection and pulling back to $25. Although the RSI remains bullish at 64, signaling continued momentum, a closer look reveals a bearish divergence forming on the daily timeframe.
While price action printed a higher high compared to the July 21 swing high, the RSI failed to do the same, creating a lower high. This divergence suggests that bulls are losing momentum.
The recent dip to $22.50 was contained by the 20-day EMA, which is likely to act as support again as AVAX price pulls back from the recent high. The good news is that the bullish crossover between the 20-day EMA and the 50-day SMA remains intact, suggesting the broader uptrend is still in play. Following this correction, AVAX may regain upward momentum and make another attempt to break through the $27 barrier.
Avalanche expands its institutional RWA footprint
While AVAX price is bearish in the short term, strong fundamentals suggest growing institutional interest in the project. Yesterday, Grove Finance, an institutional-grade credit protocol in the Sky ecosystem, announced that will go live on Avalanche, deploying up to $250 million in real-world assets to bolster the layer-1 blockchain’s tokenization traction.
With major tokenized assets such as BlackRock’s BUIDL and Franklin Templeton’s BENJI already live on the network, Avalanche continues to strengthen its position as a hub for real-world asset tokenization.
