Avalanche (AVAX), the high-performance layer-1 blockchain, is capturing significant attention as market sentiment shifts towards optimism. After a recent downturn, analysts are predicting a potential 12% rally, pushing AVAX to the $28.50 mark.
Technical Analysis – A Bullish Outlook
AVAX has demonstrated resilience at the $24.50 support level, a price point where buying pressure frequently emerges. This trend suggests that traders perceive this level as an attractive entry point. Furthermore, a bullish trendline, in place since August 2024, reinforces this support.
At the time of writing, AVAX is trading below the 200-day Exponential Moving Average (EMA) on the daily chart. This indicates potential upward momentum as the asset could soon cross above this key indicator.
The Relative Strength Index (RSI) suggests that buying momentum is building. With the RSI trading in oversold territory, it’s likely that buyers may soon re-enter the market, driving AVAX higher.
On-Chain Metrics – A Strong Bullish Sentiment
To bolster the bullish technical outlook, on-chain metrics provide further insights. According to CoinGlass, the Long/Short ratio for AVAX on Binance currently stands at 2.83, indicating significant bullish sentiment among traders. A whopping 73.91% of top traders hold long positions, while only 26.09% maintain short positions.
Also Read: Avalanche (AVAX) Price Declines 8.3% This Month – Is It Time To Buy The Undervalued Altcoin?
Liquidation levels offer additional clues. Major liquidation points are situated at $24.35 and $25.45. If AVAX surpasses $25.45, approximately $875,300 in short positions could be liquidated. Conversely, a decline to $24.35 could trigger the liquidation of around $2.94 million in long positions.
The Road Ahead
The confluence of technical signals and positive on-chain metrics paints a compelling bullish picture for AVAX. With a substantial number of traders holding long positions, the stage is set for a potential rally. Whether AVAX will reach the $28.50 target remains to be seen. However, the current market dynamics and technical indicators suggest a promising outlook for the cryptocurrency.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.