Most altcoins were trading in the green on Tuesday following Bitcoin’s 12-day high at $43K. DeFi platform Avalanche was the second highest gainer among its top 10 competitors, climbing by 17% over the last 24 hours alone. The chart showed that AVAX had the potential to rise by another 11% before a correction took place.
Avalanche 4-hour Time Frame
Avalanche bulls had already navigated through the testing waters of a resistance area between $75.8-$81. The price was now traveling through a pocket of low liquidity, which are areas where the price travels at a relatively faster fast rate. With the 4-hour 20, 50, and 200 SMA’s (not shown) running bullish, AVAX was in a healthy position to extend its value. The next major resistance lay at $98, which meant that another 11% surge was likely before a correction. A close above $101 could even see AVAX make way to 22 December’s swing high of $128, provided buying volumes remain consistent. The outcome was backed by a bullish RSI and MACD as well.
Investors Laud Subnets
Avalanche’s gains were not just tied to the broader market. Data from LunarCrush revealed that Avalanche was trending on social media platforms, with the weekly social dominance and social volume up by 7% and 15%, respectively. The trends come during a time when the network’s ‘subnets’ were getting recognized by the community. Subnets are Avalanche’s scaling solution, much like Ethereum’s layer-2 solutions.
They allow projects to leverage individual chains that are connected to the Avalanche mainnet without taking space on the actual mainnet. Recently, blockchain-based gaming projects Crabada and Ascenders became one of the first few platforms to subscribe to Avalanche’s subnet.
Trading Strategy
Those wishing to trade AVAX tokens can set up a buy order at $81 and exit their trade when the price tags $98-resistance. Stop-loss can be kept at $76, slightly below the lower limit of a support area. The hypothetical trade setup offers a risk/reward ratio of 3.14.
Conclusion
There was a lucrative buy opportunity available on the AVAX chart. The platform was trending on social media websites and the buying euphoria was set to continue in a risk-on broader market.