Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
AVAX witnessed a 20% price increase in the past 10 days
Demand from AVAX in the derivatives market remained positive
Avalanche [AVAX] was up 20%, rising from $10.85 to $12.97 in the past 10 days. Based on the daily charts, AVAX bulls could be targeting a critical supply area.
At the time of writing, AVAX was flashing red and trading at $12.53. It had just faced a near-term price rejection at $12.97. Likewise, BTC facing rejection at $17.50K, but could be supported if the January 12 US Consumer Price Index (CPI) announcement favors traditional stock markets.
Such a BTC rally could boost AVAX bulls to overcome the $12.97 hurdle and target this supply zone.
Read Avalanche [AVAX] Price prediction 2023-24
The $14.0 Supply Zone: Can the Bulls Reach It?
AVAX/USDT on TradingView
The Relative Strength Index (RSI) on the daily chart stood at 57, a significant level above the 50 midpoint. It had risen from the oversold territory since the beginning of the year. This showed that buying pressure had steadily increased over the past 10 days; as such, bulls predominated.
Therefore, AVAX bulls could try to move above the $12.97 level and target the $14.0 supply zone, especially if BTC moves above $17.50K. However, AVAX bulls can face intense resistance from sellers as they reach the supply zone.
So investors with diamond hands could wait and sell out in this zone. Nevertheless, a strong bullish BTC could try to push AVAX even above the supply zone, but for that to happen, bulls have to overcome some additional obstacles.
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Alternatively, bears may gain leverage before AVAX reaches the supply zone and drive prices down. Such a downward move would invalidate the above bullish bias. The downtrend can be checked by the $11.73 or $10.85 support levels.
AVAX saw positive sentiment and demand in the derivatives market.
Source: Sentiment
According to Santiment, the weighted sentiment and Binance Funding Rate for the AVAX/USDT pair have remained on the positive side since January 5. This showed that investors remained bullish on AVAX and demand in the derivatives market remained unchanged despite a slight drop in prices at the time of writing.
However, a decline in trading volumes could undermine the bulls’ upward momentum. Any increase in trading volume alongside a bullish BTC could signal a major rally towards the supply zone. Therefore, investors should follow the movements of BTC.
This post AVAX: Here’s why bulls were able to attack or bypass the $14 supply zone
was published first on https://ambcrypto.com/avax-heres-why-bulls-could-target-or-bypass-the-14-supply-zone/
