AVAX Bulls Setting Sights on $32 Amidst Growing Pressure on Short Sellers
Avalanche [AVAX] appears to have transitioned into a bullish phase following a period of continual declines. The current month has seen a notable surge in momentum, breaching short-term resistance at the $27 mark.
This development could potentially propel AVAX towards the $32 mark in the immediate future, provided it can sustain its ongoing rally.
The upturn in AVAX’s fortunes may have been spurred by the liquidation of short positions, particularly with expectations of a reversal around the $27 price level.
Hyblock Capital reported a sharp rise in net shorts (green) on Binance between September 23rd and 24th.
Additionally, CryptoCrypto recorded a significant increase in buy volume (blue) on September 24th, possibly contributing to AVAX’s breakthrough above resistance.
Moreover, there was a resurgence in long positions (brown) following a previous decline in the same session, indicating renewed bullish sentiment.
Liquidations, coupled with heightened demand, could further drive bullish momentum. AVAX heat maps highlighted a surge in liquidations at the $28.20 price level within the last 24 hours.
Although the heat map signaled a liquidity sweep at that level, the subsequent outcome did not suggest a continuation of the robust momentum.
In the last 24 hours, AVAX bulls have tapered off, resulting in a 2.71% decline at the time of this report.
Trading at $27.67 presently, AVAX’s current valuation reflects a degree of uncertainty regarding its capacity to sustain strong demand at its current levels.
However, a broader analysis of its chart reveals a cup and handle pattern, hinting at the early stages of an upward recovery trend.
If this pattern holds true, it implies a bullish bias in the coming weeks or months for AVAX.
On-chain data indicates continued dominance by the bulls in terms of demand.
This week saw a peak in AVAX inflows to large holder addresses, reaching 4.97 million coins, while outflows peaked at 3.67 million coins.
Latest data as of September 24th showed address inflows slowing to 2.45 million AVAX, still surpassing large holder outflows of 1.34 million AVAX on the same day.
Despite a significant decline in demand, it remained superior to the selling pressure, particularly around the day of the short liquidations.