Home> web3.0> body text

Avalanche (AVAX) Sees Bullish Resurgence, But Key Indicators Reveal Underlying Weakness

王林
Release: 2024-08-19 18:19:21
Original
806 people have browsed it

AVAX began trading within an ascending channel on August 6, following the broader market downturn on August 5, which resulted in over $1B in leveraged positions

Avalanche (AVAX) Sees Bullish Resurgence, But Key Indicators Reveal Underlying Weakness

After the broader market downturn on August 5, which saw over $1 billion in leveraged positions liquidated, Avalanche (AVAX) began trading within an ascending channel on August 6.

At press time, the altcoin is trading at $20.66, up 5% from its August 5 closing price of $19.54.

When an asset trades within an ascending channel, its price moves within a range defined by a flat horizontal upper resistance line and a rising lower support line. This pattern is typically bullish, indicating that an asset’s buyers are gradually gaining strength and pushing its price higher. At the same time, its sellers are maintaining a consistent level of resistance.

This technical setup suggests that AVAX buyers have been slowly building momentum over the past two weeks. However, readings from the Moving Average Convergence/Divergence (MACD) indicator show a surge in buyers’ presence in the market. On August 17, the token’s MACD line (blue) crossed above its signal line (orange).

When an asset’s MACD line crosses above its signal line, it signals a potential momentum shift from bearish to bullish. This crossover indicates that the shorter-term moving average is gaining speed over the longer-term average, which traders often interpret as a buy signal and a precursor to a rally.

Adding to this bullish sentiment, AVAX’s funding rate across exchanges has turned positive for the first time since early August, according to data from Coinglass. This positive funding rate further supports the growing optimism among traders.

A positive funding rate indicates a higher demand for long positions. This means that more traders in the asset’s futures market are buying it in anticipation of a rally than those betting against price growth.

However, while AVAX’s bullish MACD and positive funding rate may suggest potential upward momentum, other indicators reveal an underlying weakness. For instance, AVAX’s Relative Strength Index (RSI) stands at 39.53, well below the neutral 50 level, suggesting that selling pressure still outweighs buying interest.

Additionally, the Chaikin Money Flow (CMF) remains negative, indicating that despite the recent price rally, buying pressure isn’t strong enough to offset ongoing selling activity. These indicators suggest that AVAX’s bullish momentum may be limited.

If selling pressure intensifies, AVAX may break below the support line of its ascending triangle, potentially retesting the August 5 low of $19.54.

On the other hand, if buying activity persists and overshadows token distribution, AVAX’s price will rally above $20 to trade at $28.64.

The above is the detailed content of Avalanche (AVAX) Sees Bullish Resurgence, But Key Indicators Reveal Underlying Weakness. For more information, please follow other related articles on the PHP Chinese website!

source:php.cn
Statement of this Website
The content of this article is voluntarily contributed by netizens, and the copyright belongs to the original author. This site does not assume corresponding legal responsibility. If you find any content suspected of plagiarism or infringement, please contact admin@php.cn
Latest Downloads
More>
Web Effects
Website Source Code
Website Materials
Front End Template
About us Disclaimer Sitemap
php.cn:Public welfare online PHP training,Help PHP learners grow quickly!