Avalanche saw an increase of almost 70% this first week of December. Let’s see together the future prospects for the AVAX price.
Avalanche Situation (AVAX)
By crossing the psychological threshold of $20, the price of Avalanche (AVAX) maintained its upward momentum, reaching a new annual peak around $40. This level corresponds to the last bullish target mentioned in our analysis of November 29. He was identified as a long-standing key resistance. Currently, AVAX is trading slightly below this threshold, with the price hovering around $38.
Thus, it appears that Avalanche has officially reversed its medium to long term downtrend. These words can be supported by the 50 and 200 day moving averages, crossed and oriented upwards. However, despite oscillators indicating bullish momentum, the RSI reveals an overbought situation and suggests the appearance of a bearish divergence. This suggests a possible period of consolidation or correction on the part of the cryptocurrency.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.
Focus on derivatives (AVAXUSDT)
AVAXUSDT open interest continues to follow its price direction. It has increased by +116% since the start of the month with an addition of positions (Long and short) approaching +$166 million. This reflects an increase in trader participation, theoretically on the buy side.
The liquidation heat map for AVAX reveals key areas with buy and sell orders awaiting execution. Just above AVAX’s current price, the $42 zone stands out. Below the current price, important levels to watch include $34, $31, $25, and finally the $20-22 area. As the market approaches this level, it could trigger these orders, which could cause the cryptocurrency’s volatility to increase. Therefore, this area could be attractive for investors. Please note that these orders may be canceled with time.
Assumptions for the price of Avalanche (AVAX)
If the price of AVAX manages to remain above $40, we could anticipate a bullish continuation up to the level of $55 or even $60. The next resistance to take into account, if the bullish movement continues, would be around $80. At this stage, this would represent an increase close to +96%.
If the price of AVAX fails to cross and remain above $40, we could envisage a return to $31. The next level to take into account, if the bearish movement continues, would be around $22 or $20. At this stage, this would represent a drop close to – 47%.
Conclusion
Avalanche maintained its bullish momentum, recording an impressive rise of over 245% in less than two months. This development strongly suggests that AVAX’s mid-to-long term trend is reversing. However, after such a parabolic rise, a consolidation or correction phase is necessary to healthily follow its dynamics. Thus, it will be important to carefully observe the price reaction on the different identifiable levels to confirm or not the different hypotheses made. Beware of potential “fake out” and “market squeeze” in each situation. Additionally, let’s not forget that these scenarios are based solely on technical analysis. The price of cryptocurrencies may change more or less quickly, depending on other more fundamental factors.
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