Over the last few weeks, Avalanche [AVAX] has maintained an upward trend within an ascending channel. With a breakthrough above the 50-day EMA, the bulls have successfully sustained an upward trajectory, driving the price towards the 200-day EMA.
Nevertheless, recent price movements indicate a possible retracement as AVAX approaches critical resistance levels.
At the time of writing, AVAX was trading at $28.29, showing a decrease of approximately 2.51% in the past 24 hours. Despite this slight decline, the bullish momentum remains strong, with the 20-day EMA crossing above the 50-day EMA signaling the continued upward trend.
Is a long-term uptrend on the horizon for AVAX?
The 20-day EMA, currently at $26.99, and the 50-day EMA, at $25.62, are both trending upwards, indicating a consistent bullish outlook in the short term.
However, the 200-day EMA, positioned at $28.65, acts as a significant resistance level. Failure to surpass this level could result in a temporary pullback.
With the MACD line above the signal line, along with a positive histogram, the bullish sentiment is further confirmed. Yet, the appearance of recent red candles on the daily chart suggests a potential short-term bearish crossover should selling pressure persist.
If AVAX manages to close above the $28.65 level (200-day EMA), the bulls might target the $31.3 resistance. A successful breakout above this point could pave the way for further price increases towards the $34-$36 range in the days ahead.
On the downside, failure to maintain levels above the 200-day EMA could see the price revisiting the $26.99 support level, followed by a more significant support at $25.62 (50-day EMA).
Should AVAX experience a sustained decline below these levels, it could potentially face further downside movement towards the $22-$20 range.
Insights from Derivatives Data
AVAX’s trading volume surged by 36.82% in the past day, indicating rising interest among traders and hinting at a significant price movement on the horizon.
Contrastingly, Open Interest decreased by 3.38%, implying that some traders have closed their positions. This disparity between volume and open interest suggests uncertainty in market sentiment.
With the overall long/short ratio standing at 0.9433, slightly favoring sellers, it is essential to note that on Binance, the long/short ratio for top traders is at 2.2206, indicating a strong bullish sentiment among major market participants.
Market sentiment and Bitcoin’s performance are crucial factors that will also influence AVAX’s short-term price trajectory.