In comparison to the rest of the cryptocurrency market, the price of Avalanche (AVAX) has been mostly directionless during the past few days.
The price of the avalanche has had a rollercoaster week thus far, because of an increased volatility in its recent price action.
Avalanche's price fell by more than 20% over the last week, compared to the average of 10% in cryptocurrencies across the rest of the altcoin market. This made it one of the most severely affected layer-1 networks over the market's last dump.
However, the list of woes for the cryptocurrency only appears to be getting longer as K33 recently excluded Avalanche from its KVQ Index.
This means that Avalanche has left the ranks of cryptocurrencies the analytics firm deems potentially bullish in terms of criteria like inflationary pressure and ownership concentration.
Asides from how the excessive market supply of the cryptocurrency implies that AVAX's current negative trend may continue, there are a few more developments on the cryptocurrency.
K33 via the recently published Vinter Quality Index has released a few insights as to what is going on with Avalanche.
The analytics firm recently excluded Avalanche from its K33-Vinter index (KVQ) index.
The KVQ index is a smart beta index for crypto assets, and tokens/coins must pass the Quality Filter to be included in the index. At the end of the day, cryptos included in the index are the only ones that have a low possibility of causing permanent financial loss.
As per the report attached to AVAX's exclusion from the index, the cryptocurrency has a sizable portion of its future supply that remains unclaimed due to rewards and vesting schedules.
This suggests that because of problems with its supply, the cryptocurrency may be vulnerable to unexpectedly bearish circumstances in the future.
According to K33, the facts on Avalanche are the same as when they made their earlier evaluations in February.
However, K33 noted that they might have miscalculated the expected supply pressure from a "combination of significant inflation and token unlocks".
As a result, Avalanche earns poorer ratings for Inflation and Ownership Concentration, which accounts for why it was excluded from the index.
Despite the recent bullishness in the general cryptocurrency market over the last few days, AVAX bears have adamantly refused to close their short trades.
The active sell orders from AVAX presently surpass demand, according to the exchange market depth chart from IntoTheBlock, which displays the combined buy/sell orders from major exchanges.
As per the blockchain data tracking platform, 1.6 million AVAX have been put into sell orders, while just 1.3 million AVAX have buy orders. Over 300,000 AVAX in excess might lead to downward pressure as sellers may try to cut their asking prices to meet their orders.
AVAX may be presenting a chance at a short-term bullish entry after all, in the charts.
After hitting the $21.8 zone sometime on 19 April, AVAX declined sharply, hitting the bottom of an ascending triangle it has been in since September last year.
According to the chart above, AVAX has had trouble breaking through the $22 zone for months now, and a break above it may be a challenge at this point.
However, following the price of the cryptocurrency up the base of the triangle, we can see that the bulls are making efforts to push back against the bears. This indicates an increase in demand, and a possible rally to the top of the triangle when the bulls step in again to buy the current dip.
The current formation presents a strong potential for a 24% rise as the bulls push the cryptocurrency right back up to test the $22 zone.
Conversely, if the bears manage to push the cryptocurrency into a breakdown of its lower support, the resulting decline would be steep and will start with a break through the $14 support.
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