Key Takeaways
AVAX prices are approaching the peak of its months-long ascending triangle consolidation phase, with momentum favoring bulls at press time.
Avalanche [AVAX] has been consolidating inside an ascending triangle for months, with price squeezing tighter into the pattern.
This week’s bounce off the triangle support has already triggered a sharp move — the token is up more than 12% in the past day.
The overall structure setup seemed to be in for a breakout attempt, especially when paired with the building bullish momentum on the daily chart.
Source: TradingView
Momentum starting to build
Technicals leant bullish at press time. The stochastic RSI just turned up from oversold levels, suggesting that buyers are stepping back in.
However, that does not guarantee follow-through, but paired with the recent rally, it gives bulls a little more weight heading into the final stretch of the consolidation phase.
Sellers still have the upper hand
On-chain data tells a slightly different story. Both the spot cumulative volume delta and futures activity show that sellers remain active.
In simple terms, while price is pushing higher, a lot of that push is happening against steady sell orders. This tug-of-war explains why AVAX has not broken out cleanly just yet.
Source: CryptoQuant
Liquidity may be the decider
One factor that could tip the scales is liquidity. CryptoQuant’s current liquidation maps data highlight several liquidation clusters sitting above the market.
Liquidity clusters are commonly known for attracting price flows. If price drifts toward that zone, it could fuel a quick push higher as shorts get forced out.
The move could further add more confidence to the market for investor to chip in, increasing the likelihood of a potential breakout.
Source: CoinGlass
For now, AVAX sits at a crossroads. The technical structure on the daily chart favors the bulls, despite the market still indicating plenty of hesitation.
If momentum and liquidity align, a breakout could finally materialize. However, if the momentum fails to materialize, the consolidation might be prolonged in the short run, but the market bias majorly leans to the bulls.
