Any further losses could confirm a breakout from the rising channel on the daily chart.
Derivatives data shows cautious but slightly bullish sentiment among top traders, which could stabilize the current uptrend.
Avalanche [AVAX] has continued its uptrend within an ascending channel over the past few weeks.
After breaking above the 50-day EMA, the bulls secured a steady uptrend and pushed the price towards the 200-day EMA.
However, recent price action suggests a possible pullback as it approaches key resistance levels.
AVAX is trading at $28.29 at the time of writing, down about 2.51% over the past 24 hours. Despite the decline, bullish momentum remains as the 20-day EMA crosses above the 50-day EMA.
Can AVAX Bulls Trigger a Long-Term Uptrend?
Source: TradingView, AVAX/USDT
The 20-day EMA at $26.99 and the 50-day EMA at $25.62 suggest a short-term bullish bias.
However, the 200-day EMA at $28.65 is currently acting as strong resistance. If the price fails to break above this level, a short-term pullback could occur.
The MACD line confirms the bullish advantage as it is above the signal line. The histogram is also in positive territory, but the recent red candles on the daily chart could lead to a temporary bearish crossover if sellers continue to apply pressure.
If AVAX closes above $28.65 (200-day EMA), the bulls could push the price towards the $31.3 resistance. A breakout above this level could open the way for further gains in the $34-$36 range in the coming days.
Conversely, if AVAX fails to hold above the 200-day EMA, the price could revisit the $26.99 support, with the next major support at $25.62 (50-day EMA).
A sustained decline below this range could open the way down to $22-20.
Derivative data reveals this
Source: Coinglass
AVAX trading volume has increased by 36.82% over the past day. This increase in volume shows growing interest from traders, which could signal a strong move in price.
However, Open Interest decreased by 3.38%, indicating that some traders closed their positions. This discrepancy between volume and open interest could imply uncertainty about the direction of the market.
The overall long/short ratio stands at 0.9433, favoring the sellers. However, the long/short ratio on Binance for top traders is 2.2206, indicating that major buyers are betting on further price increases.
It is also important to note that the overall market sentiment and Bitcoin movements will play a major role in determining the short-term direction of AVAX.
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