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Avalanche: Why AVAX’s rally faces THIS test after $2.4M whale deposit
Avalanche [$AVAX] encountered exchange-side selling pressure after a whale transferred tokens worth $2.4 million into Coinbase.
The whale transferred the tokens in multiple transactions over a period of 4 hours. Besides, the wallet retained over 865,400 $AVAX, worth $5.73 million, after completing those deposits.Notably, the remaining holdings carried additional supply implications because the whale was yet to stake the tokens.
Therefore, those tokens remained liquid and potentially available for further transfers toward exchanges.With the broader crypto market experiencing gains today, $AVAX’s price rose 6.8% to $6.79 in 24 hours, at press time.
Market activity was also substantially higher, with daily volume rising by 129.52% to about $415 million.That growth provided even more space for buyers to absorb incoming supply without having to sell the recovery immediately.
However, more whale deposits may necessitate the need for more demand near the resistance level.
Top traders kept leaning toward longs
Bullish positioning among Binance’s top traders complemented the sharp expansion in $AVAX trading activity. The top trader accounts consisted of 65.82% long and 34.18% short accounts.
Accordingly, this resulted in aLong/Short Ratioof 1.93 as of writing, giving bullish accounts a substantial numerical advantage.This positioning strengthened the demand argument behind $AVAX’s recovery toward the upper range boundary.
However, concentrated long positioning also introduced vulnerability should buyers lose control around $7.00.A rejection may force leveraged traders to either exit their position or lose their ability to counter additional whale-linked supply.
The buyer’s long side dominance prevailed for now with growing participation in the broader market.
Positive funding backs leveraged bulls
Derivatives traders confirmed the bullish sentiment with the $AVAX’s Funding Rate on the OI-Weighted basis standing at around 0.0100%, at press time.
The positive funding meant that leveraged longs paid off shorts in order to hold their positions. Therefore, speculative demand aligned with Binance’s long-account dominance rather than contradicting the recovery.Notably, the funding had also fluctuated between positive and negative territory during previous sessions.
However, the latest positive reading accompanied $AVAX’s renewed push toward the range ceiling. This combination bolstered evidence of increased upside bet exposure by leverage traders.
Still, positive funding carried a different risk when paired with heavily long-biased accounts. Crowded positioning could amplify downside pressure should $AVAX encounter aggressive selling near resistance.
Can $AVAX finally clear $7?
The bulls gained in momentum following $AVAX’s firm defense of the $6.30 support level. The token then moved back toward $6.92, which is just a step away from $7.00.
Importantly, at the time of writing, the MACD was stronger during the final swing to resistance rather than earlier in the range. The histogram remained positive at 0.050, while the MACD line remained above its signal line at 0.016.
A breakout above $7.00 would create a roadmap to $8.00, where another significant resistance level is present. Beyond this level, sustained demand could bring the $9.00 resistance back into focus.
However, a further rejection may forceAvalancheto remain range-bound and draw in the attention of the established $6.30 support level.Ultimately, despite the whale-driven exchange supply, buyer demand had the better near-term hand.
Rising volume, long dominance, positive funding, and MACD improvement contributed to $AVAX’s recovery. Therefore, a $7.00 breakout could strengthen the bullish case toward $8.00.
Final Summary
- $AVAX buyers gained strength as volume surged 129.52% despite fresh whale supply.
- Holding above $6.30 keeps buyers positioned for another challenge of $7.00.
Source: cryptonews.net