AVAX Eyes $8.65 as Price Holds Key Support Level

Avalanche [AVAX] retested the $7 former resistance zone towards the end of August. On the 2nd of September, AVAX crypto began a bullish reaction that continued towards the $8 level, even though Bitcoin [BTC] faced a setback and fell below $80k in recent days.

Since the 4th of September, the spot CVD for AVAX crypto has been rising slowly. So, too, was the Open Interest, climbing from $145.6 million to $164.9 million, according to Coinalyze data. The Funding Rates were also positive, showing market participants remained bullishly positioned.

The Avalanche price trend was also likely influenced by Aave V4 deposits reaching an all-time high of $19.1 million on Avalanche.

The RSI on the daily timeframe was at 66.6, showing strong upward momentum. The OBV did not have a decisive trend, oscillating about the July highs without a clear breakout.

The volume trends showed buyer and seller pressure was relatively evenly matched, which slightly dented the idea that AVAX would see continued price gains.

Moreover, the higher timeframe swing structure has been bearish since June. The consolidation around $6.5 in recent months, as well as the recent breakout past $7.1 and the subsequent retest, was part of a broader downtrend.

The move ongoing was a retracement, and it could extend toward the $8.65 and $9.46 levels, which are important Fibonacci retracement levels (pale yellow).

The $6.31 and $7.11 support levels (cyan) keep the 4-hour swing and internal structure bullish. The $7.4 level was also a local higher low, indicating a short-term uptrend in progress.

A breakout past the $8.1 supply zone will be a strong signal that the rally will continue toward $8.65 and $9.46. Swing traders can maintain this bullish bias, so long as the $7.1 support level holds.

• AVAX crypto saw a retracement toward the $7 demand zone towards the end of August.
• Steady spot and derivative demand have helped Avalanche token price defend a key support at $7.1 and push higher.