The token price may drop when near or above avg hodl price as avg hodl price represents most traders’ break-even point.
e.g., LooksRare (1M) made two attempts to break the avg hodl price of $2.8 but failed.
If the avg hodl price goes up when the token price rises, it may further support the uptrend. As it indicates traders are buying the rise.
e.g., LooksRare (LOOKS) Jan 10 — Feb 5
The gap between avg hodl price & current price turns wide to narrow. It may signal the price bottom