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Recent indicators show a potential recovery for AVAX, which could attract more investors as the cryptocurrency sector grapples with shifting market dynamics.
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While market participation saw a decline, key on-chain metrics reveal a notable interest in AVAX as traders position themselves for potential gains.
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As noted by Coinglass, the recent increase in AVAX’s Open Interest by 6.50% reflects an optimistic sentiment among traders looking for new opportunities.
AVAX shows signs of recovery in the crypto market as Open Interest rises and significant outflows indicate potential accumulation, raising bullish sentiments.
AVAX price momentum shifts amid investor interest
Currently priced around $34.60, AVAX has experienced a resurgence, climbing over 3.05% within 24 hours. This uptick in price could suggest an early indication of a bullish trend. Notably, market participation has decreased by 15%, indicating that traders might be cautiously awaiting clearer signals before making substantial moves.
Understanding trader sentiment and engagement
Despite this cautious approach, there remains a strong undercurrent of interest from traders, as highlighted by the analytics from Coinglass. The latest data indicates that AVAX’s Open Interest has surged, signaling a rising number of new positions established on exchanges.
Additionally, long-term investors are showing renewed confidence in AVAX. The recorded outflows totaling $3.54 million from exchanges suggest that these investors are accumulating tokens, likely viewing them as undervalued assets poised for growth.
Source: Coinglass
Technical analysis reveals bullish patterns for AVAX
The recent bullish momentum surrounding AVAX can largely be attributed to its favorable technical indicators. According to COINOTAG’s analysis, the inverted head and shoulders pattern formed on the four-hour chart denotes a potentially significant breakout ahead, enticing traders to engage.
Source: TradingView
AVAX price prediction and the implications of current trends
From a technical perspective, the formation of the inverted head and shoulders pattern typically suggests a price increase following a successful breakout. If AVAX can maintain momentum and secure a closing price above the $35 level, the altcoin could realistically aim for an initial target of $38, corresponding to an approximate increase of 8.50%.
Continuing this trend, if market conditions remain favorable, AVAX might experience a more substantial rally, potentially reaching $41.50, reflecting a notable 25% increase from current levels.
However, it is worth noting that AVAX still trades below the 200 Exponential Moving Average (EMA), indicating it has not yet fully exited its downtrend despite the recent bullish indicators. The current Relative Strength Index (RSI) at 53 reinforces this analysis, suggesting that while a potential rally is possible, traders should proceed with caution in the near term.
Conclusion
In summary, the recent developments surrounding AVAX signal a potentially promising phase for the token amid shifting market conditions. Traders and investors alike are encouraged to keep a close watch on both price movements and on-chain metrics to capitalize on opportunities while assessing potential risks effectively. AVAX’s ability to break key resistance levels and sustain bullish momentum will be vital in dictating its price trajectory in the coming days.
