Key Insights
- The AVAX price cup and handle pattern indicates the potential next move of Avalanche.
- AgriFORCE confirms plans to hold AVAX in its crypto treasury.
- AVAX longs face liquidation risks as the price recently showed signs of momentum breakdown.
AVAX price continued to demonstrate resilience despite recently breaking its aggressive bullish pattern.
It has somehow managed to avoid a major retracement, and Agriforce’s latest rebrand was at the heart of the cryptocurrency’s sustained bullish confidence.
AgriFORCE reportedly rebranded into AVAX One, and it also revealed that it will create an AVAX treasury. The company intends to invest over $700 million in buying the first batch of AVAX crypto as part of the treasury.
The announcement resulted in a 200% surge in its stock price, while also boosting AVAX price. The latter had previously encountered some sell pressure, but news of the AVAX treasury set the pace for recovery while discouraging more sell pressure.
Interestingly, AVAX followed up the latest development with a massive spike in daily futures volume. AVAX futures trading volumes surged as high as $5.3 billion in the last 24 hours.
This latest spike in futures trading volumes was the highest daily volume recorded since December 2023. A clear indicator that investor confidence was elevated courtesy of the AVAX One rebrand and the creation of an AVAX treasury.
AVAX Price Risks a Pullback as Leverage Appetite Grows
The surging Avalanche volumes mostly manifested as bullish activity on the AVAX price chart. The Avalanche price exchanged hands at $34 at press time, courtesy of a 2.5% uptick in the last 24 hours.
AVAX RSI indicator hovered at 68%, hence it was not yet in overbought territory. This factor, combined with the optimism in the derivatives segment, indicated a bearish bias in the market. However, this also underscored a potential liquidation scenario.
Heavy bullish optimism may create a potential liquidity zone as more buyers jump in. This may entice whales to push for a liquidity sweep, especially considering that the AVAX price just came from a substantial rally in the last 3 weeks.
Moreover, Avalanche price recently demonstrated a momentum breakdown. More AVAX holders are in profit, and a pullback may trigger a rush towards securing recent gains.
The possibility of a liquidation event was high for the remaining days this month.
However, there was one other major factor that indicated that the cryptocurrency was likely to maintain a bullish long-term bias.
AVAX Cup and Handle Pattern Signals More Upside Ahead
AVAX price has been trading in a long-term cup and handle pattern that has been active for the last few months.
Its price action indicates that demand has been building up since June, and it has since then been forming an uptrend, signalling the start of the second half of the pattern.
The cup and handle pattern suggests that AVAX price might be headed to the $41 to $45 price range.
In other words, Avalanche price might rally by at least 20% to 28% before retesting the next major resistance zone.
However, that outcome will depend on whether AVAX can sustain demand while warding off the bears.
A look at the current stage of demand for the cryptocurrency, especially among the whales, revealed that they maintained an overall bullish bias.
Whales acquired about $4 million worth of AVAX in the last 48 hours. This was in the spot market across Binance, OKX, and Coinbase. There was also $20 million worth of Avalanche long futures positions.
A liquidation event is less likely when whales contribute to demand. However, a cautiously optimistic approach is warranted, especially considering how rapidly the markets can change.