- Avalanche showcases a bullish trend, nearing the $10 resistance level from September.
- A surge in the Open Interest and positive indicators suggest potential for a breakout past the $10 mark.
Bitcoin’s Impact and AVAX’s Momentum
The cryptocurrency market is brimming with optimism, and Avalanche (AVAX) has been no exception. In fact, its bullish trajectory has been notably influenced by Bitcoin’s recent performance, acting as a catalyst for a broader market revival.
Historical data highlights the significance of the $10 mark for AVAX. A previous analysis by AMBCrypto in early September underlined its role as a support point, predicting a potential drop to $8.6—a prophecy that came true by 25 September. Now, as we observe, AVAX is back at the $10 frontier. The looming question: will this resistance hold or give way?
Deciphering the Indicators
A closer look at the AVAX/USDT chart on TradingView reveals an H4 bearish breaker block from late August, now being retested as a resistance. However, the accumulating evidence suggests that a breakout might not be far off. The bullish structure of AVAX’s price action combined with the Relative Strength Index (RSI) consistently surpassing the neutral 50 threshold indicates strong upward momentum.
Further bolstering the breakout narrative, the On-Balance Volume (OBV) has registered significant gains recently, showcasing robust demand in the market.
In such an environment, it might be precarious for traders to hastily short at the $10 mark. Should there be a rejection from this level, coupled with a change in the market structure in the shorter timeframes, brave traders might contemplate entering a short position targeting the recent low of $8.6. This strategy would, however, be nullified if AVAX concludes an H4 trading window above $10.16.
Spot Market Demand Signifies Potential Breakout
Recent data from Coinalyze indicates a surge in Open Interest by $20 million as AVAX made impressive strides. This, combined with the funding rate being in the green and the spot CVD trending upwards like the OBV, points to a consistent demand for the asset.
While the market’s bullish sentiment suggests that shorting AVAX could be a gamble, a temporary retreat to $9.5 might be on the cards. But with the overwhelming buying pressure, a full retracement seems improbable. For traders with an eagle eye, waiting for AVAX to leap beyond $10.16 and then retesting might be the ideal strategy to target the next resistance at $11.2.
