AVAX bulls push price to $10 resistance; is a breakout imminent?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
alt HD: Avalanche bulls run prices back to the $10 resistance as odds of a breakout look good
- Avalanche has been strongly bullish over the past week
- Traders can wait for a reaction at $10 and the lower timeframe charts to decide which way the sentiment was
How much are 1, 10, or 100 AVAX worth today?
A previous analysis of Avalanche from AMBCrypto published on 5 September showcased the importance of the $10 as support. It noted that a move south to $8.6 was possible, which occurred on 25 September. At the time of writing, AVAX was trading at the $10 psychological level again- will we see a rejection?
The bearish breaker block at $10 was important once more
Highlighted by the red box, the H4 bearish breaker block from 22 August was retested as resistance. Yet, all the factors showed that a breakout was possible in the near term. The price action of AVAX outlined a bullish market structure.
The Relative Strength Index (RSI) has been well above the neutral 50 mark over the past week as prices climbed higher. Moreover, the On-Balance Volume (OBV) also witnessed hefty gains in recent days. Together, the indicators signaled bullish momentum and good demand.
Therefore, blindly entering a short position at the $10 mark could be risky. However, a rejection from this level accompanied by a shift in the lower timeframe market structure such as 1-hour could be used by courageous traders to enter a short position targeting the local lows at $8.6. This idea would be invalidated if AVAX closed an H4 session above $10.16.
The high demand in the spot market was a sign that Avalanche might be ready for a breakout past $10
Over the past few days, the Open Interest shot higher, gaining $20 million as AVAX made rapid gains. They indicated bullish euphoria in the market, with buyers chasing green candles. The funding rate was positive. As well, the spot CVD trended higher and like the OBV suggested steady demand for the asset.
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Given the bullishness in the market, shorting AVAX might be too risky. A pullback to $9.5 in search of liquidity was possible, but an entire retracement of the rally with such strong bidding could be unlikely. Therefore traders can wait for a breakout past $10.16 and subsequent retest to go long, targeting the $11.2 resistance.