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Disclaimer: The information presented does not constitute financial, investment, trading, or any other type of advice and is solely the opinion of the author.
- AVAX has very strong bullish momentum and has sparked debate about overextension.
- A violation of the $30 zone was critical for long-term investors.
Avalanche (AVAX) was one of the best-performing large-cap altcoins in December. In fact, it was up more than 62% this month before recently plummeting to $32. A move above long-term resistance and the psychological round figure of $30 was a signal of the intentions of cryptocurrency buyers.
According to a recent AMBCrypto report, a significant portion of AVAX holders have benefited. Market sentiment was reported to be solidly optimistic, and this remains true today.
Avalanche Bull was punished for being late to the party on Monday
Source: AVAX/USDT on TradingView
Technical analysis of Avalanche’s higher period price chart highlighted that the token is very bullish. It has been switched to ‘up-only’ mode since early November. There was some consolidation near $20 in late November, but new highs were reached in December.
In August 2022, AVAX set a monthly high of $30.89. The $28-$30 zone represented a strong resistance zone, as was where the Avalanche consolidated and then declined sharply a year ago. This supply zone has been shattered over the past few days as the bulls seem unstoppable.
RSI signaled the same at 84 and on-balance volume has moved higher to capture the high buying volume in recent weeks. The $41-$44 area is expected to serve as the next resistance level. Meanwhile, it’s still unclear whether it can get back below $30.
Could we see sweeps and reversals if pockets of liquidity move up?
Prices are attracted by liquidity. AMBCrypto’s analysis of Hyblock liquidation level data highlighted the importance of the $34 and $38 regions. More specifically, the $34.2 and $37.75-$38.3 areas are likely to be the next important support and resistance areas.
How much is 1, 10 or 100 AVAX worth today?
A move north to initiate a short liquidation before a possible reversal at $38. However, given the recent strength of buyers, it does not make sense to sell tokens based on higher timeframe charts. Instead, swing traders can wait for a significant drop below $30 before buying.