Forecast: Here’s Why Avalanche (AVAX) Price Could Advance to $75

Price Insights:

Avalanche (AVAX) price broke above $61 on March 18, 2024 its highest since the TerraUST crash back in May 2022. Derivatives market trends shows that rally is being majorly driven my organic spot market demand, rather than leveraged speculative trading.

With the bulls firmly in control of the spot markets, how high can AVAX price reach in the week ahead?

AVAX Funding Rate has dipped 89% Amid the ongoing price rally

While Bitcoin (BTC) and Ethereum (ETH) struggle for momentum over the past week,  crypto investors have turned to rival mega-cap projects like Avalanche and Solana (SOL).

Between March 11 and March 18, AVAX price has recorded a massive 55% uptick, as it surged above the $60 mark for the first time in 2-years.

But, notably, a rare bullish signal has emerged in derivatives markets which could propel the Avalanche prices even further in the week ahead.

Coinglass’ Funding rate metric represents the aggregate fees that LONG contract holders paying to the SHORTs to keep their bullish positions open.

As Avalanche price rally broke out, funding rate has entered a sharp decline.

The chart below above shows that while AVAX price has increased 55% between March 11 and March 18, the Funding rate has dropped 89% from 0.09% to $0.01.

Essentially, strategic investors could interpret is as major bullish signal when funding rate declines during a price rally, for a number of reasons.

Firstly, dropping funding rates may reflect improving market efficiency or decreasing market volatility. In such cases, traders may perceive the market as more stable and less risky, leading to increased buying interest and bullish sentiment.

Secondly, this reduction in the cost of leverage can incentivize more traders to enter the market or increase their position sizes, leading to increased buying pressure and more upward price movement. It could also signal to new entrants that despite 55% price gains in the past week, Avalanche market is far from overheated.

If this scenario plays out as predicted, AVAX price could surge further toward $70 in the week ahead.

AVAX Price Prediction: $75 Could be the Next Target

Drawing inferences from the 89% decline in Avalanche funding rate amid a 55% rally, Avalanche (AVAX) price looks well-positioned for enter another leg-up toward $75 in the week ahead.

However, in the short-term, the bulls could face major initial resistance at the $65 territory. A decisive breakout above that level could trigger a major rally towards $75.

Alternatively, the BTC and ETH struggles spread towards the mega-cap altcoin markets, Avalanche price stands the risk of a reversal toward $50.

But with funding rates trending low, AVAX price could avoid rapid downswings as bulls have low exposure to margin calls on leveraged LONG positions.