During the past few weeks, Avalanche [AVAX] has been on an upward trend inside an ascending channel. The bulls were able to maintain a steady uptrend after surpassing the 50-day EMA, pushing the price closer to the 200-day EMA.
Nevertheless, recent price movements indicate a potential pullback as significant resistance levels approach.
At the time of writing, AVAX was trading at $28.29, showing a decrease of approximately 2.51% over the last 24 hours. Despite this decline, the bullish momentum remained strong, with the 20-day EMA moving above the 50-day EMA.
Will AVAX Bulls Trigger a Prolonged Upward Trend?
Both the 20-day EMA at $26.99 and the 50-day EMA at $25.62 displayed an upward trend, indicating a continued bullish sentiment in the short term.
However, the 200-day EMA at $28.65 is currently acting as a formidable resistance level. Failure to break above this level might lead to a short-term retracement.
The MACD line confirmed a bullish outlook by staying above the signal line. Despite the histogram being in positive territory, recent red candles on the daily chart could result in a temporary bearish crossover if selling pressure persists.
If AVAX manages to close above the $28.65 mark (200-day EMA), bulls could aim to push the price towards the $31.3 resistance level. Breaking above this level could pave the way for further upward movement towards the $34-$36 range in the upcoming days.
Conversely, if AVAX fails to maintain above the 200-day EMA, it may retest the $26.99 support level, followed by the crucial support at $25.62 (50-day EMA).
A sustained drop below this range might indicate further downside potential towards $22-$20.
Derivatives Data Analysis Unveiled
The volume for AVAX surged by 36.82% in the previous day, suggesting growing interest among traders and potentially signaling an impending substantial price movement.
However, Open Interest decreased by 3.38%, indicating that some traders have closed their positions. This disparity between volume and Open Interest could suggest uncertainty regarding the market direction.
The overall long/short ratio stood at 0.9433, slightly favoring sellers. Yet, Binance’s long/short ratio for top traders indicated a ratio of 2.2206, suggesting that significant market participants were anticipating further price uptrends.
It is important to consider that broader market sentiment and Bitcoin’s movements will also significantly impact the short-term trajectory of AVAX.