Currently the ninth most valuable cryptocurrency, Avalanche (AVAX), has risen over 6% in the last 24 hours, surpassing $38. This upward movement could be just the beginning of a larger surge for AVAX holders. So, what levels of movement could be possible?
Signs of Rise Indicate Potential Breakout
Our analysis on the daily AVAX/USD chart points to a potential breakout scenario. Bulls are preparing to challenge the $39 resistance level, and a successful breakout could likely elevate AVAX to $43.85. Conversely, if there is a rejection, a pullback towards the next support zone at $33.85 could occur.
The Relative Strength Index (RSI) is currently at 54.42, indicating a revival in buying momentum. Additional support comes from the Awesome Oscillator (AO), which has been indicating increasing upward momentum for AVAX since it rose from negative levels. Moreover, the Directional Movement Index (DMI) supports the bullish outlook by showing more buyer aggression compared to sellers in the market.
Key Levels to Watch
While the Average Directional Index (ADX) continues to remain relatively weak at 13.49, a rise above 25 with the +DMI staying above the -DMI could confirm AVAX’s path towards $40. However, the Liquidation Heat Map highlights potential obstacles, with large-scale liquidations expected around $37.
Investors with high leverage and low margin balances are particularly at risk, especially if AVAX surpasses $38. Additionally, changes in volume could indicate potential price fluctuations. Furthermore, a decrease in volume could likely lead to a pullback, while an increase in volume could potentially propel AVAX towards the $50 mark.
Funding Rate Dynamics
On-chain data shows a positive Funding Rate for AVAX, indicating that long positions are paying a funding fee to short positions. This bullish indicator further supports the potential for a continuous price increase.
In conclusion, while AVAX shows promising signs of upward momentum, investors should be vigilant about key resistance levels, potential liquidation risks, and fluctuations in volume and funding rates. As always, it is important to remember that careful risk management is essential when navigating the volatile cryptocurrency market.
