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Avalanche (AVAX) appears to be one of the few major cryptocurrencies to buck the recent crypto decline, posting a phenomenal 79% weekly gain as others have declined.

Some analysts believe this is due to recent partnership announcements and a rise in trading volumes and total value locked, while others claim there’s been a shift in how altcoins are valued.

While Bitcoin (BTC) and Ether (ETH) saw a 6% nosedive on Dec. 11, AVAX gained 13.6% in the last 24 hours, per CoinGecko data.

Ryan Mcmillin, the chief investment officer at Merkle Tree Capital, told Cointelegraph that much of the excitement around AVAX could be due to traditional financial heavyweights JPMorgan and Citi partnering with the Avalanche Foundation for their real-world asset tokenization initiatives.

“More recently, the strength of AVAX looks to be associated with a spike in daily transactions from around $200,000 to $4.5 million over the last couple of days. Daily active addresses have also seen a solid trend to the upside,” Millin added.

Nonfungible token (NFT) entrepreneur Wylie Aronow has confirmed he isn’t ready to return to Yuga Labs, the NFT firm he co-founded, despite making “steady progress” with his health.

“I’m not ready to come back to even part-time work. I have to ensure I’m around for a long time, for those who need me,” Aronow said on Dec. 11 in addressing rumors of a potential return.

“My point is, while I’m making steady progress with my health, there’s still some pretty wild swings, and this is a marathon for me.”

Aronow explained that some days he’s ready to throw himself into the “deep end,” while on other days he feels he needs to be “wheel-chaired” to an emergency room.

Aronow, also known as Gordon Goner, took leave of absence in late January to following a congestive heart failure diagnosis. In the same announcement, Wylie rejected rumors that Yuga Labs used neo-Nazi and racist imagery, referring to them as “lies.”

Bitcoin price is down 5% over the last 24 hours to trade at $41,645 on Dec. 11. Despite the sharp price correction, technical indicators and on-chain data show that Bitcoin (BTC) still displays strength as bulls strive to push the price back above $44,000.

On-chain data shows Bitcoin price “over-extended”

Bitcoin dropped as much as 7.2%, falling to $40,300 on Coinbase, triggering a conversation among analysts. Julio Moreno, head of research at on-chain analytics firm CryptoQuant, said that the flagship cryptocurrency’s price was “overheating after the recent rally above” the $40,000 psychological level. 

More data from on-chain data analysis firm Lookintobitcoin highlighted exhaustion among bulls. According to its December 2023 report, Bitcoin’s price has reached its golden ratio multiplier near-term target, highlighted by the Crosby Ratio, which shows Bitcoin’s near-term price at “over-extended levels,” resulting in the need to correct, or at least slow down.

The golden ratio multiplier is an indicator that explores Bitcoin’s adoption curve and market cycles to understand how the price may behave in medium to long-term time frames.

In other words, Bitcoin reached overbought conditions above $40,000 as buyer exhaustion set in. Note that the flagship cryptocurrency’s relative strength index (RSI) shows that its has been massively overbought since Dec. 5. 

Bitcoin (BTC) closed last week with gains of 9.55%, but started the new week on a weak note, falling near $40,500. The sharp correction in Bitcoin also caused liquidations in several altcoins. According to CoinGlass data, cross-crypto long liquidations for Dec. 11 were more than $300 million.

The sharp fall does not change the trend in Bitcoin and altcoins, as corrections are a part and parcel of any uptrend. Generally, vertical rallies are followed by sharp pullbacks, which shake out the weaker hands and allow long-term investors to buy more at lower levels.

The corrections are unlikely to stretch longer due to several bullish catalysts in 2024. Analysts expect one or more Bitcoin exchange-traded funds to receive regulatory approval in January, which could be a game changer. That will be followed by Bitcoin halving in April, and finally, expectations of a rate cut by the United States Federal Reserve could boost risky assets. Goldman Sachs anticipates the Fed to start cutting rates in the third quarter of 2024.

What are the important levels that could arrest the fall in Bitcoin and altcoins? Let’s analyze the charts to find out.

S&P 500 Index price analysis

The bulls have successfully held the S&P 500 Index (SPX) above the breakout level of 4,541 for the past several days. This suggests that the buyers are trying to flip the level into support.