Avalanche (AVAX) is struggling to recover its losses in the highly volatile crypto market. Compared to other Layer-1 blockchains, the consolidation of AVAX has been slow, raising concerns about its future performance. However, recent data from Coinglass reveals a positive turn in AVAX’s funding rate, which could signal a shift in market dynamics.
In futures trading, a positive funding rate often indicates increased demand for long positions, as traders are prepared to pay a premium to hold these positions. This suggests a growing bullish sentiment as more traders bet on the rise of AVAX’s price. This shift may be a significant departure from the recently dominant bearish outlook in the market.
The current positive funding rate for AVAX indicates that bullish sentiment is gaining momentum. This momentum could lead to a breakout if bulls manage to push the price above the critical $23 level. Buyers are hopeful that a breakout above $22.79 will alter the weekly bearish structure. Some investors are looking back to October 2023 for parallels.
Analysts, such as Daghan on X, foresee a potential reversal and draw comparisons between current market conditions and those in October 2023. Then, Avalanche’s price surged from $8 to a peak of $65 by March 18th. Daghan’s analysis highlights the rapid price movements of AVAX following long and deep corrections, which typically mark a shift from bearish to bullish trends.
Currently, Avalanche is trading at $22.11 and needs to break above its key resistance level to challenge the supply zone around $22.79 and establish a higher high. If the bulls can reclaim $23, it could pave the way for a broader market recovery for AVAX. However, a failure to hold above the August 5 low of $19.53 poses the risk of a downside move, potentially retesting demand below $17.50, with the next bearish target at $15.
As the positive funding rate hints at a possible shift in market sentiment, the coming days will be crucial in determining whether AVAX can escape its current consolidation phase and resume its upward trajectory.
 sees a positive funding rate, hinting at growing bullish sentiment as traders eye a breakout above $23 for potential market recovery.){kind=link}