- The crypto market is displaying intriguing signals, particularly with the momentum shift.
- However, concerns about demand persist, underscoring a bearish outlook.
- A potential ETF for Avalanche (AVAX) might be on the horizon if Solana’s (SOL) application gets the nod.
With regulatory bodies showing increased acceptance toward crypto ETFs, significant developments are in the air.
Momentum Shift Signals Potential Bull Run
Despite the broader bear market structure, there’s emerging optimism in the crypto market. The Relative Strength Index (RSI) for AVAX on the daily chart surpassing the neutral 50 mark indicates a possible bullish momentum. Nevertheless, the prevailing trend remains bearish, demanding a cautious approach.
Key Resistance Levels to Watch
Notably, the crucial lower high sits at $34. A breakthrough past this mark would be a significant indicator of potential trend reversal. However, to sustain such a shift, the On-Balance Volume (OBV) needs to exhibit a consistent upward trend, which, unfortunately, remains in decline.
Short-Term Optimism Amidst Long-Term Challenges
The past week’s price action brought short-term bullish sentiment for AVAX, despite the overarching bearish trend. Traders saw the Open Interest rise from $140.2 million to an impressive $181.1 million, reflecting heightened speculative trading activity.
Speculative Interest vs. Organic Demand
Despite the rising Open Interest, the spot CVD has remained relatively flat, highlighting a lack of organic demand. This disparity suggests that while speculative sentiments are high, it may not translate into sustained buying pressure, keeping the higher timeframe bearish trend intact.
Conclusion
In conclusion, while there’s short-term bullish momentum in the AVAX market, the longer-term bearish trend remains unchallenged. Traders need to keep a vigilant eye on resistance levels and volume dynamics to navigate the market effectively. The potential for an ETF, correlated with Solana’s progress, adds a speculative layer to AVAX’s future, requiring a strategic and informed approach.
