Avalanche (AVAX) has needed help recovering its losses on this volatile crypto market. In comparison with other Layer-1 (L1) blockchains, AVAX consolidation might have been faster, raising concerns about its future performance.
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Despite this uncertainty, recent price motion shows AVAX consolidation above the $19.80 support, trading at $22.11 when writing and making a positive sentiment amongst bulls. The Avalanche funding rate has turned positive for the primary time since late July, and a few analysts are even anticipating a possible reversal in Avalanche’s fortunes.
AVAX Funding Rate Turns Positive
In response to Coinglass data, AVAX’s funding rate has flipped to positive territory, signaling a possible change in market dynamics.
Avalanche Funding Rate. | Source: Coinglass
A positive funding rate in futures trading typically indicates increased demand for long positions, as traders are willing to pay a premium to carry them. This bullish pressure suggests that more traders are betting on AVAX’s price rising slightly than falling, a notable shift from the bearish sentiment that has dominated the market in recent weeks.
The present positive funding rate for AVAX indicates that bullish sentiment is gaining momentum, which could foreshadow a breakout if bulls successfully push the worth above the crucial $23 level.
October 2023 Vs. August 2024: Avalanche AT A Turning Point?
Buyers hope a breakout above $22.79 will change the weekly bearish structure, and a few investors are looking back to October 2023 for similarities.
Analysts like Daghan on X anticipate a reversal and have compared the present market conditions and people in October 2023, just before Avalanche’s price skyrocketed from $8 to this 12 months’s peak of $65 by March 18th.
AVAX change of structure in October 2023. | Source: Daghan on X AVAX/USDT chart on TradingView
In his comparison, Daghan explains the intensity of AVAX’s uptrends after long and deep corrections, showing how briskly its price moves after it shifts from bearish to bullish.
Avalanche aggressive breakout after changing trends in October 2023. | Source: Daghan on X AVAX/USDT chart on TradingView
Currently, Avalanche is trading at $22.11 and must break above this key resistance level to challenge the availability zone around $22.79 and establish a latest higher high. If bulls can reclaim the $23 level, it could signal a broader market recovery for AVAX. Nonetheless, if the market fails to carry above the August 5 low at $19.53, there may be a risk of a downside move, potentially retesting demand below $17.50, with the subsequent bearish goal at $15.
AVAX consolidation range. | Source: AVAX/USDT chart on TradingView
Because the funding rate signals a possible shift in market sentiment, the approaching days might be critical in determining whether AVAX can break free from its current consolidation and resume its upward trajectory.
Cover image from Unsplash, chart from Tradingview