AVAX: Bulls and bears tussle for $13
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- AVAX’s pullback has hit a key confluence of 50% Fib and demand zone.
- Open Interest and liquidation were skewed against the bulls.
Avalanche’s [AVAX] press time price level of $13 presented a great buying opportunity but with a caveat. The weak Bitcoin [BTC] price action could spoil the party for long positions. Notably, the pullback since mid-July has exposed the altcoin to >18% loss after dropping from $15.97 to around $13 as of press time.
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Put differently, short-sellers enjoyed over 15% profit during AVAX’s pullback. As expected, the retracement eased at the crucial confluence area, which could offer bulls re-entry options only if BTC clears its immediate resistance.
Who will budge in the confluence area?
Price chart indicators emphasized weak buying pressure and demand for AVAX which could undermine bulls. For example, the RSI (Relative Strength Index) retreated from the overbought zone and was below a neutral level of 50.
Similarly, the CMF (Chaikin Money Flow), which tracks capital inflows and outflows of AVAX, faced rejection at the zero mark and was yet to cross above it decisively. Taken together, the indicators show muted demand over the past few days.
Nevertheless, price action has hit a crucial confluence area of 50% Fib level and a bullish order block of $12.85 – $13.38 (cyan). So, the area is an excellent level for going long, with immediate targets at $14 (March lows) and $15 (June high). But the bulls must watch out for a weakening BTC.
A liquidity grab beyond the confluence area towards $12 couldn’t be overruled. But a candlestick session close below the confluence area will complicate matters for bulls.
Open Interest rates declined
The status of AVAX’s futures market further urged caution to bulls aiming at the confluence area. For example, the Open Interest (OI) rates, which track open contracts and overall sentiment, have declined since mid-July. It emphasizes a drop in demand and overall bearish sentiment in the futures market.
How much are 1,10,100 AVAXs worth today?
The bearish sentiment was further confirmed by liquidation data, which indicated more long positions were discouraged in the past 24 hours.
So, AVAX bulls could only have an edge at the confluence area if BTC crosses the $29.5k resistance and advances further.