AVAX tests critical support as positive sentiment overwhelms retracement risks from liquidations leverage.
- AVAX was testing a crucial support level, with on-chain metrics showing positive signs. The altcoin liquidity level has a potential short-term retracement, but the overall market remains bullish.
Avalanche [AVAX] had witnessed a 24% price surge over the last 48 hours after bouncing off from the $22 price level.
The altcoin was testing a critical previous symmetrical triangle support level at around $28 at press time.
This technical pattern, if not broken, could turn the support into resistance, potentially hindering the altcoin’s bullish momentum.
Source: TradingView
AVAX’s positive sentiment
AMBCrypto’s closer analysis of the on-chain metrics revealed some encouraging signals. Notably, as of this writing, there was a 49% increase in whale activity and a 14% rise in trading volume, per IntoTheBlock.
Source: IntoTheBlock
This suggested that larger market participants and active traders were actively engaged with AVAX, potentially indicating a positive sentiment.
Short-term retracement ahead?
The liquidation heatmap data further complicated the picture.
AMBCrypto’s look at Coinglass’ data indicated a significant liquidation pool of 563K worth of AVAX at the $26.73 level, suggesting that a short-term retracement could be on the cards.
This level could act as a support or resistance, depending on the market’s reaction and the magnitude of the whale push and trading activity.
In the case of Avalanche, whales were diving into the market, as indicated by the rising number of large transactions.
AVAX could then face a short retracement before an anticipated rally after the next liquidations are leveraged.
Source: Coinglass
What’s next for AVAX?
As AVAX tests the previous symmetrical triangle support, investors will be closely watching the market’s response.
If the support holds and becomes a new resistance price level, the altcoin could see bullish momentum continue to a further price rally.
However, if the resistance level at $28.16 holds, the market could witness a short-term retracement.
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