Avalanche (AVAX), the 10th-ranked cryptocurrency, has been on a tear in the past week, not only emerging as the top performer among major digital assets but also reaching its highest price point in nearly two years.
According to CoinMarketCap data, AVAX surged by an impressive 20%, surpassing its previous peak in May 2022 and reaching a price of $60 at the time of writing. This remarkable rally has ignited a wave of bullish sentiment within the crypto community.
AVAX Gets Boost From Strong Market Signals
Analysts are pointing to a confluence of on-chain activity and market signals that paint a bullish picture for AVAX. NewsBTC’s analysis revealed a key factor: 84% of AVAX holders are currently sitting on profits, signifying a wave of positive sentiment within the investor community. This profitable position fosters a more optimistic environment, potentially attracting new buyers to the market.
Source: IntoTheBlock
Digging deeper into on-chain data, market observers at NewsBTC noticed a significant rise in large buy orders on the Avalanche network. This trend suggests that institutional investors or whales might be accumulating AVAX, potentially fueling the upward price movement.
The bullish momentum isn’t confined to on-chain activity. The spot market is also exhibiting strong demand for AVAX. Coinalyze data indicates a steady rise in the token’s Cumulative Volume Delta (CVD) since March 17th. CVD is a metric that gauges the difference between buying and selling volumes, and its current uptick suggests a clear dominance of buying pressure in the spot market.
Source: Coinalyze
Positive Vibes In The Air For AVAX
The derivatives market is echoing the optimism as well. Open Interest (OI) in AVAX futures contracts has been on an upward trajectory, reflecting a growing interest from investors looking to leverage the potential price increase.
It’s important to note that OI doesn’t necessarily indicate a long-biased market (where more traders are betting on a price rise), but rather highlights increased participation from both buyers and sellers.
However, the rising price alongside surging OI suggests that buyers are currently more aggressive, potentially leading to a breakout above resistance levels.
Source: IntoTheBlock
With this bullish tailwind propelling AVAX forward, analysts are cautiously optimistic about its future trajectory. Some market observers are of the opinion that AVAX has the potential to reach $70 soon.
However, they acknowledge the presence of a psychological hurdle at $70, where the price might encounter some resistance before continuing its climb. If the bulls can overcome this obstacle and achieve a decisive breakout, the bullish target of $75 might be within reach.
Total crypto market cap. Chart: TradingView
Looking at the potential downside risks, the article warns of a possible rejection at $70, which could trigger a price correction back down to $63. The report also emphasizes that the predicted upswing might not be a linear path, with potential price fluctuations along the way.
Avalanche (AVAX) is experiencing a period of strong momentum, buoyed by positive on-chain data, a surge in investor interest, and a bullish market sentiment. While some resistance levels and potential price corrections are to be expected, the overall outlook for AVAX appears promising in the near future.
Featured image from Pexels, chart from TradingView