fxs_header_sponsor_anchor

What to do as Avalanche’s AVAX shows signs of a long squeeze

  • AVAX price shows an affinity to move higher and retest the $21.47 hurdle, but this could be a trap.
  • Investors should note a string of equal lows remains untapped at $15.97, adding credence to a potential short squeeze unfolding.
  • A four-hour candlestick close that flips the $21.47 hurdle into a support floor could invalidate the short squeeze thesis.

AVAX price has seen an upthrust in bullish momentum that has been helpful for its holders. However, some investors could soon become the victim of a market makers’ short squeeze.

AVAX price remains steady

AVAX price dropped 28% after rallying 60% between June 18 and June 26. This downswing is basically a mean reversion. Depending on which camp takes control, Avalanche will head in that direction.

For now, a quick look at AVAX price shows that the buyers are in control as the altcoin has rallied 24% in the last six days and looks like it will continue heading higher. In such a case, investors can expect a retest of $21.47. The push higher, however, could be a lure set by market makers.

The equal lows formed around $15.97 have sell-stop liquidity resting below them, which has been untapped. So, this move to retest $21.47 could be the perfect opportunity for market makers to trap investors going long the altcoin by reversing the ascent and pushing AVAX price lower.

It is recommended interested market participants wait to open long positions after AVAX price sweeps the $15.97 barrier or at the retest of the $14.75 support level. 

AVAX/USDT 1-day chart

However, if AVAX price produces a four-hour candlestick above $21.47 and flips it into a support floor, that will invalidate the short-squeeze thesis and suggest instead AVAX price will rally higher and retest the $27.89 barrier.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.