Avalanche Support Holds Strong as Traders Eye Potential Breakout to $30
thecryptobasic.com 20 August 2024 12:33, UTC Avalanche (AVAX) has continued to display resilience, experiencing an impressive 5% surge over the past week.
This upward trend follows a significant market downturn on August 5, which led to the liquidation of over $1 billion in leveraged positions. AVAX, now trading around $22, previously experienced resistance at this level but shows no nearby on-chain obstacles.
Current market conditions suggest AVAX’s future movement depends on broader sentiment, with optimism potentially driving the price towards $30.
Key Price Levels
Notably, data from IntoTheBlock offers insights into AVAX holders’ positions. Address activity highlights the importance of specific price ranges. For instance, a cluster of addresses at the $14.53 to $18.40 range remains in profit, suggesting strong accumulation at these levels.
Another significant accumulation exists between $18.40 and $20.14, where many addresses are marginally in profit.
This suggests that this range may act as a support level in the event of a price decline. Interestingly, the next price range of $21.92 to $26.26 sees more addresses at a loss, indicating that it could serve as resistance as those holders may exit at breakeven.
Possible Targets
However, higher price levels, such as $26.26 to $34.57, reveal even more addresses at a loss, indicating substantial accumulation during that period. These levels could further resist upward movement, as holders look to minimize losses.
Nonetheless, prices above $34.57 see fewer addresses involved, indicating less trading activity at higher levels, which could lessen the resistance during a more extended rally.
The analyst’s assertion that AVAX could climb to $30 if market sentiment remains positive is plausible, given the chart shows significant resistance clusters between $26.26 and $34.57.
However, if sentiment worsens, the potential for a drop to $16 also seems likely based on the support levels visualized in the chart.
Open Interest Increases
Elsewhere, a rise in AVAX’s Open Interest suggests renewed confidence in the asset. Following the release of the U.S. Bureau of Labor Statistics’ inflation data on August 14, Open Interest in AVAX jumped from $182 million to $201.6 million by August 15.
The 10.77% increase in Open Interestduring a period of price consolidation, suggests that a significant price move may be imminent.
Two key factors are driving this: growing trader confidence and the possibility of a short squeeze. If bears fail to push AVAX below critical support levels, bulls may regain control and drive prices higher.
