Journalist
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Key Takeaways
What does the Avalanche Futures data show?
They signaled caution, as leveraged positions were building up fast.
How did long-term investors react to this information?
The price action chart showed that the uptrend was intact, and a price dip toward $26-$27 would be a buying opportunity.
The 15th of September saw a good amount of price volatility for crypto markets. Avalanche’s [AVAX] price action was influenced by the market leader’s price movement.
Bitcoin [BTC] has shed 1.65% in recent hours after climbing to the $116.7k mark, which seemed to point toward a bullish breakout past the $116.5k resistance.
Instead, it turned out to be a liquidity grab. In the hours before press time, BTC fell to $114.6k, dipping below a low of $114.7k on the 13th of September.
Now that the liquidity in both directions has been taken out, Bitcoin could ready itself to establish this week’s trend.
The FOMC meeting on the 17th of September will likely see the announcement of a rate cut.
This event, though bullish in the long-term, could introduce further short-term volatility that Bitcoin and altcoin traders should be wary of.
There were other reasons why Avalanche traders should be extra careful in the next few days.
Should you expect an Avalanche price dip?
Source: CryptoQuant
Crypto analyst Burak Kesmeci pointed out that AVAX showed clear signs of heating up. The futures volume bubble map showed red bubbles, which denoted that leveraged positions are piling up fast.
Historically, when Avalanche Futures enter this overheated zone, it has been followed by price corrections.
This could be the case once again, especially if Bitcoin and the rest of the market witness short-term price drops and heightened volatility.
It does not mean an immediate price crash would occur, but rather that traders should be wary of a price dip.
Source: CryptoQuant
The Futures Taker CVD also showed a taker sell dominance phase over the past six weeks. This could be a warning sign of a price correction building up, but the price action has a bullish structure.
Could it be that the Avalanche rally is fragile?
Source: AVAX/USDT on TradingView
The market structure on the 1-day chart was bullish. The CMF was above +0.05 to show strong buying pressure, and the MFI agreed with this finding.
The move past the $26.5 resistance came with a sizeable fair value gap (white box) which hinted at bullish strength.
A price dip to the $25.4-$26.5 support zone should be regarded as a buying opportunity. Overall, Avalanche has a bullish long-term outlook, with a chance of a price dip toward $26.5-$27.5.