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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- AVAX has extremely strong bullish momentum and sparked discussion about overload
- Breaking the $30 zone was crucial for long-term investors
Avalanche [AVAX] was one of the best performing large-cap altcoins in December. In fact, the price rose just over 62% this month, before the recent plunge to $32. The move past the long-term resistance and psychological round number of $30 was a sign of intent from the crypto’s buyers.
A recent AMBCrypto report noted that a significant portion of AVAX holders made profits. Market sentiment was also reported to be solidly bullish, a fact that still holds true today.
Avalanche bulls who arrived late to the party were punished on Monday
Source: AVAX/USDT on TradingView
Technical analysis of Avalanche’s higher time frame price charts highlighted that the token was extremely bullish. The system has been in ‘up-only’ mode since the beginning of November. There was some consolidation around $20 in late November, but December brought new highs.
In August 2022, AVAX set a monthly high of $30.89. The $28-$30 zone represented a strong resistance area, much like where Avalanche consolidated a year ago before falling sharply. In recent days, this supply zone has been smashed to pieces as the bullish force seems unstoppable.
The RSI was at 84, which was the same signal, and the On-Balance Volume continued to climb higher to accommodate the high buying volume of the past few weeks. The $41-$44 region is expected to act as the next resistance. Meanwhile, it remains unclear whether we would see a retracement to $30 or lower yet.
If a pocket of liquidity goes up, will we see a reversal and a reversal?
Prices are attracted by liquidity. AMBCrypto’s analysis of Hyblock’s liquidation level data highlighted the importance of the $34 and $38 areas. More specifically, the $34.2 and $37.75-$38.3 regions are likely to be the next significant support and resistance areas.
How much is 1, 10 or 100 AVAX worth today?
A move north to trigger short liquidations before a $38 reversal is possible. And yet, given the recent buying power, it doesn’t make sense to short the token based on the higher time frame charts. Instead, swing traders can wait for a significant drop to $30 or lower before buying.