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avalanche is in complete freefall we are looking at a loss of 19 in the last 24 hours and its not just the price thats falling its also the total value locked on the chain now is this the time to be greedy when others are fearful is this the time to buy when there is blood in the streets in this video were gonna look at relative valuation we are going to look at fundamentals we are going to look at adoption metrics so by the end of this video youve got a more refined view of the avex token if it makes sense to hold avex over the long term so theres a lot of things to discuss without further ado lets jump right in hi so avalanche is having a pretty hard time recently we are looking at a drop from top to current prices of 84 roughly had you invested 1 000 just a few months back you would now have 160 dollars left now these kinds of fluctuations are not unique right weve seen something pretty similar here from the february of last year to the summer of last year a pretty similar drop now had you bought here in the summer of last year you would have gotten a pretty nice gain right more than a 10x rally from this bottom over here now is this the time again to pick up the pieces and buy when everybody is so fearful now this is probably no news to you but the entire crypto market is having a pretty bad time right now what i like to look at is a measure called total three so thats the cryptocurrency market cap minus bitcoins market cap and minus ethereums market cap so youre looking at the market cap of all the altcoins and thats total three and the issue here is that we are falling below one of the most important supports we are now even lower than the level in july 2021 and its hard to find another support over here right because we pretty much shot straight up in 2020 where is actually the potential turn around here now whats also important to note here is that avalanche is in a specific situation so its not just going down with the entire crypto market its going down more than the average so if we look at avalanches market cap and we divide this by total 3 to kind of like get the relative performance of avex we still see a very very poor performance so of course everything is going down but avex is definitely going down more and theres several ways to measure this right we could also look at avex relative to bitcoin this is expected to go down because theres some kind of inherent leverage in altcoins right when bitcoin goes up the alt coins tend to go up more and vice versa the same is true when we look at this at avex versus ethereum its simply a very strong underperformance heres avex versus solana here is avex versus cardano here is avex versus polkadot and avex versus phantom so no matter what we are looking at avex is pretty much on a fire sale right now now is this justified so on the one hand yes because the total value locked on the chain is also going down massively right it was at 13.6 billion in december of last year and now went all the way down to 4 billion that being said it also depends on what we measure this in because the way it looks to me is that its simply a contraction of the ecosystem tokens in terms of us dollar value when we look at the total value locked measured in avex this is not going down this is even going up does this mean that adoption is still increasing well yes and no because the problem is avalanche has a pretty high inflation rate so new tokens get issued pretty quickly meaning the price tends to decline when one more supply hits the market right according to the current inflation rate of avalanche is 26 per annum and thats very high for an altcoin altcoins in general do have higher inflation rates than bitcoin or ethereum because they are still growing ecosystems but the inflation rate of avex is definitely higher than usual and thats a problem in this currently bearish situation right when theres not a lot of demand but at the same time the supply increases that quickly thats a recipe for capital destruction your inflation rate should somewhat reflect the growth of the ecosystem otherwise the token value is declining and thats what we currently see with other launch now i want to show you something here this is again avalanche in us dollars and you might have noticed there is a moving average over here right this blue moving average its the 18 day moving average why did i choose that its because of a back test that ive done here so let me show you this this is an excel sheet starting in september of 2020 all the way to the 27th of april of this year and with this excel sheet we can do a simulation of buying and selling the avex token depending on whether or not the price is above or below a moving average thus we can find out whats the best duration for a moving average because when we take these moving averages right we could take a shorter duration and then have all kinds of noise and sometimes see bullish sometimes be bearish or we could take a very long duration like we could increase the number of days that we average out potentially reducing the failed signals but also potentially reacting relatively slowly so whats the ideal duration here when we backtest this when we want to bet on say rising prices when the price is above the moving average and on falling prices when the price is below the moving average what duration should we take over here and this is whats answered by this excel sheet that you can by the way also download at so thats behind the paywall thats the premium membership of this channel so lets look at the best moving average that set a few parameters so the trading fee is 0.1 percent thats for binance the start capital is 10 000 u.s and we do both we go long whenever the price is above as well as short and the price is below the moving average so we bet both on rising and on falling prices and when we do that we can then iterate over the simple and exponential moving averages and find out the best duration and doing that lets look at this in chart format here on the x-axis is the moving average duration in days on the y-axis is the annualized performance we can see most of those approaches they actually do not work for other launch so trading according to moving averages works for a lot of cryptocurrencies for avalanche its a bit of a tough sell because we can see buying and holding pretty much outperformed most trading approaches except here the 18-day right when we are around the 18 day 18 17 19 day those are above buying and holding the rest doesnt do too well so that means we cant really take a lot of moving averages to time avecs the 18 day though seems to somewhat work but it is to be completely frank somewhat of a cherry pick its pretty hard to say if this moving average duration will still be that well working in the future but its the best we have and so if we do draw a moving average we might as well take the 18 day meaning i think its a good idea to stay outside of avex until we have at least come close to that moving average and currently theres still quite a bit of a distance right 20 percent or so of course this is declining so we only have to go sideways for a week or two until we can break this but currently with all of this bearish momentum i dont think it makes sense to catch this falling knife by waiting we might not take the absolute bottom but at least we avoid to completely get shattered and lose our capital the further its going down so i personally i like to move with momentum right i like to buy when prices tend to rise and i like to sell when prices 10 to fall currently the overall momentum the overall discussion around crypto isnt bullish at all most people are pretty bearish people talk about a 20k bitcoin potentially and when bitcoin goes down that much then avex is probably not going to stay at his current value either so im not saying it will happen but what i am saying is it doesnt make sense to go completely against the masses if the count momentum is that negative that bearish i personally by the way i do like avalanche i do like the ecosystem i like that its evm compatible i like the gas fees are relatively low and i also buy into the story that more market share will get taken away from ethereum this here is a chart that shows the total value locked based on each different blockchain and in blue here the major part here this is of course ethereum so currently 64 of all total value locked is in ethereum avalanche is at 4.2 percent the binance margin is at 8.2 percent so i do buy the story that over time due to the high gas fees more money is likely going to flow out of ethereum but i also like at least in the short term to write the waves and even though comparatively speaking the market cap 2 total value locked isnt that expensive for avex the current situation coupled with the high inflation rate i think is pretty dangerous why not wait for a week or two see where it goes if it falls further then great we can buy it for even cheaper if it doesnt if it stabilizes even better because then most of the direct cells may be due to stop losses or due to forced liquidations they might be over thats at least how i see it i like to be somewhat risk averse if you can say something like this right when youre invested in crypto i simply think it makes sense to always measure the potential risk when looking at the reward now if this is your first time here and you havent yet subscribed fear free to do so because i do publish videos regularly and if you want to ask me any questions directly or if you want to get the best back-tested moving averages for other cryptocurrencies then feel free to check out the premium membership more information is over here in this video hope to see you in that video and thanks for watching this one bye Premium Membership: Get 1-on-1 Coaching: My Chart Software: My Hardware Wallet: Avalanche, Avax, Avalance Avax, Avax Crash, Avalanche Crash, Avax Crypto, Avalanche Crypto, Avalanche 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Disclaimer: I am not a financial advisor and this video does not constitute financial advice. This video is for entertainment purposes only. Please do your own research before making financial decisions. avalanche avax crypto avalanche,crypto,avax,