Avalanche (AVAX) Price Analysis: Bullish Momentum Builds as AVAX Enters Ascending Channel
Avalanche Showing Strong Recovery Momentum
After the liquidation of over $1 billion in leveraged positions on August 5, Avalanche (AVAX) began trading in an ascending channel on August 6. The altcoin is currently trading at $20.66, up 5% from its August 5 closing price of $19.54.
When an asset trades within an ascending channel, the price moves within a range consisting of a flat horizontal upper resistance line and a rising lower support line. This indicates a bull market with increasing buying pressure pushing the price higher, while sellers maintain resistance.
AVAX’s Moving Average Convergence Divergence (MACD) indicator shows a surge in buying momentum, with the MACD line crossing the signal line on August 17. Positive funding rates also contribute to bullish sentiment, reinforcing optimism among traders.
AVAX Price Rises: Uptrend Not Strong Enough
Despite the bullish MACD and positive funding ratio, AVAX still faces underlying weakness. The relative strength index (RSI) is below the neutral level of 50, indicating more sellers than buyers. Additionally, the Chaikin Money Flow (CMF) remains negative, suggesting limited upside momentum.
If selling pressure intensifies, AVAX could break below the support of the ascending triangle and retest the August 5 low of $19.54. However, continued buying activity could propel AVAX above $20, trading at $28.64.
Conclusion
In conclusion, Avalanche (AVAX) has shown bullish momentum as it enters an ascending channel, supported by positive MACD and funding rates. However, underlying indicators such as RSI and CMF point to potential weakness in the uptrend. Traders should closely monitor price levels and key support/resistance areas to gauge the next direction of AVAX’s price movement.
