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Avalanche (AVAX) Faces Key Resistance After Bullish Breakout—What Traders Should Know
Avalanche (AVAX) recorded a 2.62% increase over the past 24 hours, marking its first positive performance following a steep 26.22% decline over the last month. This rebound has caught the attention of investors and analysts, raising the question of whether it signals renewed confidence or a looming sell-off.
Smart Money Profits and Holds Strong on Avalanche
Data from Nansen reveals that smart money investors have generated significant profits despite AVAX’s overall 13% price decline during the same period. Known for their profitable strategies of buying low and selling high, these investors have reportedly secured gains as high as 375%, with unrealized profits nearing $1 million across 11 positions.
Interestingly, rather than cashing out, these smart money holders continue to hold their AVAX positions, signaling confidence or a strategic wait for further price appreciation.
Retail Investors Shift to Bearish Sentiment
In contrast, retail investors have begun to liquidate their AVAX holdings, according to CoinGlass data. After accumulating AVAX worth $11.9 million in the previous week, spot retail investors sold $821,000 in the past 24 hours, exerting downward pressure on the price.
Similarly, retail traders in the derivatives market have increased short positions, betting on further price declines. The Open Interest Weighted Funding Rate has dipped into negative territory at -0.0022%, indicating a bearish bias among derivative traders.
AVAX Chart Signals Potential Breakout, Resistance Levels Loom
Technically, AVAX broke out of a descending channel’s resistance, suggesting a possible bullish move toward the previous channel peak. However, rising selling pressure and key resistance points pose challenges.
If AVAX surpasses the first resistance level, it may confirm the bullish momentum. The next major resistance lies at $19.81, and breaking this could push Avalanche to the $22 range, representing a 27% gain from the breakout point.
Market Shows Mixed Sentiment Amidst Indecision
Meanwhile, the Total Value Locked (TVL) in Avalanche remains flat with no significant inflows or outflows, reflecting investor uncertainty. As broader market sentiment turns cautious, AVAX could face a pullback, putting recent gains to the test.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
