Avalanche (AVAX) Sees Bullish Resurgence After Market Downturn
Avalanche (AVAX) entered an ascending channel on August 6 following a significant market downturn that resulted in the liquidation of over $1 billion in leveraged positions on August 5. Despite the challenging market conditions, the altcoin is currently trading at $20.66, showing a 5% increase from its closing price on August 5.
Avalanche Showing Strong Recovery Momentum
As AVAX trades within an ascending channel, characterized by a flat horizontal resistance line and a rising support line, it indicates a bull market sentiment with increasing buying pressure driving the price up. The recent surge in buying momentum is evident in AVAX’s Moving Average Convergence Divergence (MACD) indicator, with the MACD line crossing the signal line on August 17.
With positive funding rates across exchanges and a growing optimism among traders, AVAX is poised for further upward momentum.
The crossover of MACD lines often signals a shift from bearish to bullish momentum, serving as a buy signal for traders anticipating a rebound in AVAX’s price. Positive financing rates further validate the bullish outlook, indicating a high demand for long positions.
AVAX Price Growth: Uptrend Faces Challenges
While AVAX’s MACD and funding rates suggest underlying upside potential, other indicators like the Relative Strength Index (RSI) and the Chaikin Money Flow (CMF) highlight weaknesses in the current trend. With an RSI below 50 and a negative CMF, selling pressure persists despite recent price gains.
Although the prospect of AVAX breaking below support and retesting lower levels exists, sustained buying activity could drive the price above $20, potentially reaching $28.64.
While AVAX’s upward momentum faces challenges from key indicators, the potential for a price surge remains if buying pressure outweighs selling activity.
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