- Avalanche’s price continues to rise on Monday, building on a nearly 9% increase from the prior week.
- On-chain data indicates a bullish trend, as AVAX’s long-to-short ratio has reached its highest point in over a month.
- Technical indicators and funding rates suggest the potential for a continued rally, aiming for an additional 20% increase.
The price of Avalanche (AVAX) has risen by 7%, trading above $21 on Monday after a nearly 9% rally last week. On-chain data paints a bullish picture, with AVAX’s long-to-short ratio hitting its peak in more than a month. Technical analysis alongside funding rates signals the possibility of a continued rally, targeting further gains of 20%.
Avalanche demonstrates bullish momentum by closing above its descending trendline
Last week, the price of Avalanche broke through its descending trendline (established by connecting several high points since mid-December) and found support, subsequently rallying close to 7%. At the beginning of the week, on Monday, it is maintaining a trading position above $21.39, marking a 7% gain.
Should AVAX maintain this upward trajectory and close above its weekly resistance level at $20.99, the rally could extend by 17%, targeting a significant level at $24.99. A successful close above this key price could lead to an additional 20% increase, reaching toward the psychological threshold of $30.
The Relative Strength Index (RSI) on the daily chart is currently at 53, trending upward above the neutral mark of 50, which suggests bullish momentum. Likewise, the Moving Average Convergence Divergence (MACD) indicator on the daily chart indicated a bullish crossover last week, signaling buying opportunities and an upward trend.
AVAX/USDT daily chart
Another positive sign is the AVAX long-to-short ratio, which stands at 1.18, the highest level in more than a month. A ratio above one indicates bullish sentiment in the markets, as more traders are placing bets on the asset price increasing.
AVAX long-to-short ratio chart.
According to open interest-weighted funding rate data, there are more traders anticipating a price increase for Avalanche than those predicting a decline. This index is based on the yields from futures contracts, weighted by their open interest rates. Generally, a positive funding rate indicates bullish sentiment, while negative values suggest bearish sentiment.
For AVAX, the funding metric shifted from -0.0065% on Friday to 0.0051% on Monday, indicating a positive rate, which means longs are paying shorts. This scenario often illustrates bullish sentiment in the market, hinting at potential upward pressure on Avalanche’s price.
AVAX OI-Weighted Funding Rate chart.