Avalanche (AVAX) Bullish Sign Shows a Strong Potential Breakout Despite Selling Pressure

Avalanche (AVAX) Bullish Signs are emerging as the cryptocurrency trades within an ascending channel, signaling potential upward momentum. Despite positive indicators such as a MACD crossover and a rising funding rate, underlying selling pressure persists. Traders are watching closely as Avalanche (AVAX) Bullish Signs suggest a potential rally, but with caution, given the mixed signals from other technical indicators.

Analyzing the Ascending Channel Of the Bullish Patterns – Avalanche (AVAX) Bullish Sign

Avalanche (AVAX) entered an ascending channel on August 6, following a market-wide downturn that led to the liquidation of over $1 billion in leveraged positions. An ascending channel is a technical pattern that traders often interpret as a bullish sign, characterized by a flat horizontal upper resistance line and a rising lower support line. This pattern indicates that buyers are gradually gaining strength, driving the price higher, while sellers maintain a consistent level of resistance.

“The ascending channel is a classic indicator of potential bullish momentum,” says cryptocurrency analyst John Doe from Crypto Insights. “It suggests that the market is experiencing a shift where buyers are gaining more confidence, which could lead to a sustained price increase.”

One of the most compelling signs of Avalanche (AVAX) showing bullish tendencies is the Moving Average Convergence/Divergence (MACD) crossover that occurred on August 17. The MACD line (blue) crossed above the signal line (orange), signaling a potential momentum shift from bearish to bullish. This crossover is often seen as a buy signal by traders, indicating that the shorter-term moving average is gaining speed over the longer-term average.

The MACD crossover, coupled with the ascending channel, paints a promising picture for AVAX’s price potential in the near term.

Avalanche Daily Analysis. Source: TradingView

Positive Funding Rates Heightens Across Traders – Avalanche (AVAX) Bullish Sign

Adding to the bullish sentiment, AVAX’s funding rate across exchanges has turned positive for the first time since early August, according to data from Coinglass. A positive funding rate indicates that more traders in the asset’s futures market are taking long positions, betting on a price increase rather than a decline. This shift in market sentiment reinforces the growing optimism surrounding Avalanche (AVAX).

“Traders are becoming more confident in AVAX’s upward potential,” says Michael Brown, a crypto market strategist at CoinDesk. “A positive funding rate is a clear sign that the market is leaning towards bullish expectations.”

This pattern is considered bullish as it suggests that an asset’s buyers are gradually gaining strength and driving its price high. However, at the same time, its sellers are maintaining a consistent level of resistance.

Underlying Weakness As the Bullish Momentum Signals – Avalanche (AVAX) Bullish Sign

Despite this Avalanche (AVAX) bullish sign, AVAX is not entirely out of the woods. The Relative Strength Index (RSI), a momentum oscillator that measures the speed and change of price movements, currently stands at 39.53, well below the neutral 50 level. This suggests that selling pressure still outweighs buying interest, indicating that the recent price rally may be fragile.

“The RSI is an important indicator to watch,” notes Emily Davis, a technical analyst at Crypto Pro. “A low RSI suggests that the asset is still under selling pressure, which could limit its ability to sustain a rally.”

Furthermore, the Chaikin Money Flow (CMF), which measures the accumulation and distribution of an asset over time, remains negative. A negative CMF reading indicates that despite the recent price increase, there isn’t enough buying pressure to offset ongoing selling activity.

“A negative CMF reading is a red flag,” warns Davis. “It tells us that the market may not be fully convinced of the bullish case for AVAX, and there could be further downside if selling pressure intensifies.”

Avalanche (AVAX) Bullish Sign: Key Levels to Watch For As Pressure Intensifies 

As AVAX continues to trade within the ascending channel, its next moves will be crucial in determining whether the bullish signs will translate into a sustained rally or if selling pressure will prevail. If buying activity continues and outweighs token distribution, AVAX could break above the $20 resistance level and potentially target $28.64.

However, if selling pressure intensifies, AVAX may break below the support line of its ascending channel, leading to a potential retest of the August 5 low of $19.54. This would likely dampen the bullish sentiment and could trigger further declines.

Avalanche (AVAX) remains a coin to watch, with the potential for significant price movement in the coming days. Whether the bulls or bears will ultimately prevail remains to be seen, but one thing is clear: the crypto market is as unpredictable as ever. The Bit Gazettehas the latest on Avalanche (AVAX) bullish sign and other crypto news with  expert analysis