Avalanche (AVAX) finds itself at a pivotal moment, with recent price action hinting at a significant upside breakout after a prolonged struggle. This promising surge, driven by renewed trader interest, is now met with a complex mix of on-chain signals that could either fuel further gains or trigger a swift reversal.
Technical Breakout and Conditional Rally
After enduring multiple rejections since the start of 2025, AVAX has finally cleared a long-standing resistance hurdle at the $26.60 level. This breakout, observed through its daily candle, marks a 4.5% climb in the last 24 hours, accompanied by a robust 50% surge in trading volume, signaling strong investor enthusiasm. To truly validate this move and unlock a potential 20% upside momentum towards $32, AVAX must secure a daily close above $26.75. However, a cautionary note emerges from the Average Directional Index (ADX), which currently stands at 15, indicating a weak underlying trend. Historically, breakouts occurring under such conditions often fail to sustain momentum.
Diverging On-Chain Perspectives
While the technical charts present a potentially bullish outlook, on-chain data offers a more nuanced and somewhat conflicting picture. A significant inflow of over $4.86 million worth of AVAX into exchanges within the past 24 hours suggests that some investors are actively engaging in profit-taking. This consistent movement of assets onto exchanges could potentially dampen the asset's upward trajectory, hinting at a possible price correction. Conversely, the derivatives market demonstrates strong bullish conviction among traders. Analysis of liquidation levels reveals a substantial build-up of $23.75 million in long positions, dwarfing the $6.87 million in short positions. This clear dominance of bullish bets indicates that many traders are anticipating continued price appreciation, positioning themselves for further gains in AVAX. The interplay between these profit-taking activities and strong directional betting will be crucial in determining AVAX's immediate future.
