Avalanche Price Eyes $25 Rally after 3-Day Consolidation

Avalanche price surged by 36% between August 5 and August 8, peaking at $21.69, before entering a 10% retracement towards $20 on Aug 12.  This consolidation phase could evolve into a potential $25 breakout, with the market sentiment turning increasingly optimistic.

Avalanche Price Finds Steady Support at $20

The Avalanche price rally began to lose steam over the weekend following its impressive recovery from the August 5 market crash. Despite a 36% rebound driven by bullish sentiment, AVAX failed to break above $25 resistance level as many expected.

The chart above shows how the rejection from $22.89 on Aug 9 has resulted in a 10% decline, towards $20 at the time of writing on Aug 12.

This pullback suggests that while investor interest remains high, market fundamentals are not yet strong enough to support sustained gains beyond $22.50.

Despite the retracement, Avalanche price found strong support at $20, with bears were unable to push the price below it the last three days of intense market volatility.

The bulls resilience in defending this support level indicates a firm commitment to maintaining the upward trajectory. With market sentiment beginning to shift positively, AVAX price could be primed for a significant breakout, potentially driving the price towards the $25 mark.

Bull Traders Deploy $7M Leverage

In affirmation of the bullish outlook, Avalanche derivatives market data reveals increase in aggressive trading among bull traders this week. The CoinGlass chart below, represents the total value of SHORT and LONG contracts currently listed for a particular crypto asset.

bullish traders have increased their leverage on AVAX futures contracts, with a total of $7 million in long positions, compared to $5.7 million in short positions. This imbalance in leverage underscores the growing confidence among bullish traders, who are betting on a continued upward movement in AVAX price. The liquidation map shows a concentration of long liquidations around the $18.66 level, suggesting that bulls are prepared to defend this zone aggressively. The combination of strong support at $20 and increased leverage positions signals a potential bullish breakout in the near term.

AVAX Price Forecast: $25 Retest Imminent

Furthermore, technical indicators on the daily AVAX/USD price chart indicates that a retest of the $25 level could be imminent. The prolonged consolidation above the critical $20 support area, coupled with the bullish leverage positions, sets the stage for a breakout.

The Keltner Channels (KC) indicator, which is used to identify trends and potential reversals, suggests that AVAX is currently trading within a tight range, with critical support and resistance levels coming into focus.

AVAX is currently hovering around the middle line of the Keltner Channels, which serves as an equilibrium point. The upper band of the Keltner Channels is currently positioned around $23.34, indicating this level as the first key resistance.

A break above this resistance could propel AVAX towards the $25 psychological level, where the next resistance is likely to be encountered.

On the downside, the lower band of the Keltner Channels, currently around $19.47, acts as strong support. As long as AVAX remains above that key support level, bulls have a chance to drive the price higher. And if AVAX breaks above the $23.34 resistance, it would signal a shift in momentum, potentially reclaiming the $25 level.