Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
alt HD: Avalanche bulls bring prices back to the $10 resistance as breakout chances look good
- Avalanche has been strongly bullish this past week
- Traders can wait for a reaction at $10 and the lower time frame charts to decide which way the sentiment was
Avalanche [AVAX] saw a strong uptrend as crypto market sentiment turned bullish. Bitcoins [BTC] The performance was a key catalyst for this market-wide turnaround.
How much is 1, 10 or 100 AVAX worth today?
An earlier analysis of AMBCrypto’s Avalanche, published on September 5, showed the importance of the $10 as support. It noted that a move south to $8.6 was possible, which occurred on September 25. At the time of writing, AVAX was once again trading at the psychological $10 level. Will we see a rejection?
The bearish breaker block at $10 was important again
Source: AVAX/USDT on TradingView
Highlighted by the red box, the August 22 bearish breaker block H4 was retested as resistance. Still, all factors showed that an outbreak was possible in the short term. AVAX’s price action outlined a bullish market structure.
The Relative Strength Index (RSI) was well above the neutral 50 mark last week as prices moved higher. Moreover, On-Balance Volume (OBV) also witnessed hefty gains in the past few days. Together, the indicators pointed to bullish momentum and good demand.
Therefore, blindly entering a short position at $10 can be risky. However, a rejection from this level, accompanied by a shift in the market structure with a lower time frame, such as 1 hour, could be used by brave traders to take a short position targeting the local lows of $8.6. This idea would be invalid if AVAX were to close an H4 session above $10.16.
The high demand in the spot market was a sign that Avalanche may be poised for a breakout beyond $10
Source: Coinalyse
In recent days, Open Interest skyrocketed, gaining $20 million, while AVAX posted rapid gains. They pointed to a bullish euphoria in the market, with buyers chasing green candles. The financing rate was positive. The spot CVD also trended higher and, like the OBV, suggested stable demand for the asset.
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Given the bullishness in the market, shorting AVAX could be too risky. A pullback to $9.5 in search of liquidity was possible, but a full retrace of the rally with such strong bids could be unlikely. Therefore, traders can wait for a breakout beyond $10.16 and then retest to go long, targeting the resistance at $11.2.