AVAX shorts get liquidated as price demonstrates resilience at $27 price level.
- AVAX bulls demonstrate resilience despite the resurgence of bearish expectations. Short sellers suffer as price pushes above short-term resistance.
Avalanche [AVAX] looks to have switched to bullish after months of lower lows. Its performance so far this month underscores a strong momentum which just crossed above short-term resistance at the $27 level.
This outcome that may lead to a push as high as $32 in the near term if it can sustain its latest rally.
AVAX bulls may have received a boost courtesy of short liquidations. There were high expectations of a reversal at the $27 price level.
According to Hyblock Capital, there were a surge in the number of net shorts (green) on Binance between the 23rd and the 24th of September.
Source: Hyblock Capital
AMBCrypto also witnessed a surge in buy volume (blue) on the 24th of September, which may explain AVAX’s push above resistance.
This was accompanied by a resurgence of long positions (brown) after its previous dip during the same session.
Liquidations may pave the way for more bullish momentum, especially combined with a demand spike. AVAX heat maps highlighted a surge in liquidations at the $28.20 price level in the last 24 hours.
Source: Hyblock Capital
The heat map suggests that a liquidity sweep at the aforementioned level. However, the outcome did not appear to indicate a continuation of the strong momentum.
AVAX bulls have since slowed down, yielding a 2.71% dip in the last 24 hours at the time of writing.
AVAX was worth $27.67 at the time of writing. This outcome suggests that the current level may have introduced some level of uncertainty regarding its ability to command strong demand at current levels.
However, zooming out on its chart revealed that it has been trading in a cup and handle pattern.
Source: TradingView
The pattern indicates that AVAX is in the early stages of a recovery uptrend. If this assessment holds true, then that means it will be biased in favor of the bulls at least for the next few weeks or months.
As far as demand was concerned, on-chain data showed that the bulls were still dominant.
AVAX inflows into large holder addresses (large holder inflows) peaked at 4.97 million coins this week while large holder outflows peaked at 3.67 million coins.
Source: IntoTheBlock
Address inflows had slowed to 2.45 million AVAX as per the latest data on the 24th of September. However, this was still higher than large holder outflows at 1.34 million AVAX on the same day.
This suggests that demand slowed down significantly but still outweighed sell pressure at around the same day that shorts were liquidated.
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