On-chain activity for Avalanche (AVAX) has been on the rise, which could indicate renewed investor interest in the altcoin. If the AVAX price can show a proper reversal, creating a bottom, investors might find it a valid long opportunity.
AVAX Open Interest Looks Potent For Bulls
One important indicator of price insights, Open Interest, has increased noticeably. Avalanche's Open Interest increased to $170.5 million by August 20 from $156.20 million on August 19. AVAX's price held steady during this time, increasing the possibility of rising momentum.
As is currently the case, when Open Interest rises throughout price reorganization, a notable price movement is frequently imminent. This could be favorable for AVAX for two reasons: traders may have more faith in the asset now, and if bears cannot drive the price below important support levels, there may be a brief squeeze.
Lower Inflation Is Positive For AVAX Bulls
One such upbeat catalyst is the US Bureau of Labor Statistics release on August 14 of the dovish inflation rate for CPI data. The data indicated a slowdown in inflation, which is a good thing that has changed sentiment in derivatives trading even though it did not show up right away in AVAX's spot market.
The fact that retail and whales are still rising implies that a diverse group of AVAX owners are participating.
Avalanche (AVAX) Bull Case
According to the AVAX Long/Short Ratio, the market appeared to be balanced, with roles ranging roughly 50%. This equilibrium, along with the recent uptick in on-chain activity, suggests that the market is reaching a turning point.
There are underlying demands that may accommodate such an eventuality, as evidenced by the growing network involvement.
AVAX Price Prediction Technical Analysis
In the daily chart of AVAX price, the selling pressure is visible, where the current price trades below the 50 day Exponential Moving Average.
In the weekly timeframe, the recent candlestick showed a bullish reversal, where the 2023 low is still protected. However, the bottom formation is invalid until a bullish Change of Character appears.
In the volume structure, the largest activity since March 2024 is seen at the 26.42 level, which is above the current price. As long as the current price remains below these crucial lines, we may expect a downside continuation soon.
Based on the daily outlook of AVAXUSD, a bullish breakout with a daily candle above the 27.00 level might open a long opportunity, aiming for the 40.00 psychological level.
On the other hand, the immediate resistance is at the 22.79 level, from where a bearish reversal is possible. On the downside, the crucial support is at the 17.42 level, which could be tested before reaching the 10.00 area.
