AVAX Sees 169 Percent Whale Volume Spike: But Can It Hold Above $21

Avalanche (AVAX) has recently experienced a significant breakout, lifting the cryptocurrency from months of bearish control. This movement has sparked speculation about a potential bullish reversal, marking a crucial shift in its macro price structure.

After months of struggling against a descending resistance level, AVAX has now managed to break through it, exhibiting strong signs of upward momentum. This price action follows a reversal pattern, suggesting growing buyer strength and raising hopes for a sustained uptrend.

Avalanche AVAX Signals Strong Bullish Momentum

AVAX’s recent breakout above the long-standing resistance level is a notable development in the cryptocurrency’s market journey. The breakout came after the formation of a swing failure pattern, which is often seen as a reliable signal for trend reversals.

As the price moved higher, Avalanche AVAX reclaimed important levels, including the value area high and point of control from earlier ranges. This reclaiming of key price points is a clear indication that buyers are increasingly taking charge, possibly signaling the start of a more sustained bullish movement.

The recent move above a descending resistance line marks a crucial change in market sentiment. For months, AVAX’s price had been confined below this level, unable to break free. The price action now suggests that the bearish trend may have run its course, with buyers stepping in forcefully. This change in momentum, from bearish to bullish, was further confirmed by the price reclaiming key support levels and establishing higher highs. The breakout is significant because it disrupts the long-standing resistance and opens the door for further upside potential.

Strong Buyer Participation Indicates Sustainability

One of the most important indicators supporting the bullish thesis for AVAX is the increase in trading volume. The breakout occurred alongside a noticeable uptick in volume, which is a key sign that the price movement is not just a fleeting event.

Volume profile readings confirm that the market’s participation surged as AVAX broke through the resistance. This higher level of engagement suggests that the recent price action is not a short-term anomaly but rather a reflection of genuine buyer interest and momentum that could sustain the uptrend.

For the bullish reversal to be confirmed, Avalanche AVAX must now focus on establishing a higher low. The key question in the coming days is whether the price can hold above the flipped resistance zone and form a higher low. A successful hold above this critical level would solidify the bullish structure and increase the likelihood of a continued price rally. Traders will be looking for confirmation that Avalanche AVAX is not just bouncing temporarily, but is genuinely shifting into an uptrend that could take it toward new price highs.

Transaction Volume Surge Signals Growing Interest from Large Investors

Alongside the price breakout, Avalanche AVAX has also seen a significant increase in transaction volume, particularly among large investors, also known as whales. According to on-chain analytics firm IntoTheBlock, transaction volume for Avalanche AVAX surged by 169%, which is a significant indicator of growing institutional and investor interest.

This surge in transactions, especially when accompanied by a favorable price pattern, is a strong bullish signal. Increased activity from large investors could be a precursor to a larger price increase, as their involvement often leads to more upward pressure on the asset.

Technical Indicators Suggest Further Upside Potential

Technical analysis on AVAX shows promising signs across multiple timeframes. On the weekly chart, AVAX recently retested the lower boundary of a descending channel and formed a bullish engulfing candlestick pattern. On the daily chart, the price has broken out of the descending channel and is approaching the breakout point of a bullish cup and handle pattern.

If Avalanche AVAX can maintain its upward trajectory and close above critical levels, the bullish outlook will be further confirmed, indicating substantial upside potential. As of press time, Avalanche AVAX is trading at $21.90, showing a 4.14% decline over the past day.

The Challenge of Holding Above Key Price Levels

Despite the bullish outlook, Avalanche AVAX still faces challenges ahead. The cryptocurrency is currently trading below its 200-day Exponential Moving Average (EMA), which indicates that the longer-term trend remains bearish. While this is a concern, other technical indicators, such as the Relative Strength Index (RSI), show strength and suggest that there is still room for upward movement.

The most critical factor moving forward will be whether Avalanche AVAX can sustain its position above the $21 level. A strong close above this level would solidify the bullish case and open the door for further gains.

Conclusion

Avalanche AVAX has broken free from a long-standing bearish trend, showing clear signs of a bullish reversal. The strong buyer interest, surge in transaction volume, and positive technical indicators all suggest that Avalanche AVAX could experience further upward movement. However, the critical challenge is whether the cryptocurrency can maintain its breakout levels and form a higher low.

If AVAX can continue to hold above key support zones, the potential for a move toward new price highs remains strong. Traders and investors will need to closely monitor these developments in the days ahead as Avalanche AVAX navigates this crucial phase in its market cycle.

Frequently Asked Questions (FAQ)

1- What triggered AVAX’s recent price breakout?

AVAX’s breakout was triggered by overcoming a long-standing descending resistance level and a confirmed swing failure pattern, signaling a potential trend reversal.

2: How important is the surge in AVAX’s transaction volume?

The 169% increase in transaction volume signals growing interest from large investors, strengthening the bullish outlook for AVAX’s price.

3: Can AVAX maintain its bullish momentum?

AVAX’s bullish momentum will depend on whether it can hold above the flipped resistance zone and establish a higher low, confirming the upward trend.

4: What are the key resistance levels to watch for AVAX?

Traders should monitor the $28.70 resistance level, as it has historically capped AVAX’s price and will be a critical test for continued upward movement.

Appendix: Glossary of Key Terms

AVAX – The native cryptocurrency of the Avalanche blockchain, known for its fast transaction speeds and scalability.

Swing Failure Pattern – A technical analysis pattern indicating a failed attempt to break a key price level, often signaling a reversal.

Resistance Level – A price point at which an asset struggles to rise above due to selling pressure.

Value Area High – The highest price point within a specific range that has significant trading volume, often acting as resistance.

Point of Control – The price level with the highest trading volume in a given range, often acting as a support or resistance level.

Bullish Reversal – A shift in market sentiment where prices begin to rise after a prolonged downtrend.

Relative Strength Index (RSI) – A momentum oscillator that measures the speed and change of price movements, used to identify overbought or oversold conditions.

References

Crypto.News – crypto.news

AMB Crypto – ambcrypto.com