Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is the opinion of the author only
- AVAX’s MFI was overbought and ready for a potential price reversal
- However, a break above $12.10 will negate the bearish expectations
avalanches [AVAX] The 2023 rally increased by more than 14% after rising from $10.71 to $12.30. Then it cooled and the price correction was set at $11.45.
At press time, AVAX is on yet another bullish but challenged run after Bitcoin [BTC] It failed to overcome the $17K resistance. AVAX is trading at $11.77 and it could drop lower to test the $11.45 support if BTC price correction continues.
Read avalanches [AVAX] predict the price 2023-24
Target $12.10: Can the Bulls Target It?
AVAX fell below the late December trading range of $11.59 – $11.85 but found strong support at $10.71. Moving into the new year marked a double bottom, which paved the way for a price recovery.
However, AVAX encountered a bearish order block at $12.10, which forced it to correct the price, which was held at the $11.45 support.
Price recovery at press time could be difficult as the Money Flow Index (MFI) has reached overbought territory. This indicates that accumulation has peaked and distribution is underway, which could lead to a price reversal.
The RSI rejected at the midpoint but moved slightly higher and to the side. Equilibrium Volume (OBV) also decreased slightly. This indicates that the buying pressure gradually increased after the sharp decline, but it was not enough to push the buyers to reach the $12.10 level.
Therefore, AVAX could drop to $11.59 or $11.45. Short sellers can sell higher and buy back cheaper at these levels.
However, a break above the downside order block at $12.10 will invalidate the expectations. Such a move could allow the AVAX bulls to target $12.46, especially if BTC is bullish.
AVAX’s OI fell, but the futures market outlook and demand remained unchanged
According to Coinglass, open interest in AVAX has increased since mid-December and appears to have peaked at press time. This indicates that AVAX has seen an increase in the flow of funds into the options and futures markets.
However, the drop in AVAX’s OI at press time indicates that more money is leaving the futures market.
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However, AVAX sentiment remained positive and demand in the derivatives market remained unchanged, as evidenced by the positive and unchanged Binance funding rate for the AVAX/USDT pair.
This means that AVAX could rally if BTC makes a recovery attempt. Therefore, investors should look at BTC before taking any action.