(Akash Girimath – FXStreet)
– AVAX price shows an affinity to move higher and retest the $21.47 hurdle, but this could be a trap.
– Investors should note a string of equal lows remains untapped at $15.97, adding credence to a potential short squeeze unfolding.
– A four-hour candlestick close that flips the $21.47 hurdle into a support floor could invalidate the short squeeze thesis.
AVAX price has seen an upthrust in bullish momentum that has been helpful for its holders. However, some investors could soon become the victim of a market makers’ short squeeze.
AVAX price remains steady
AVAX price dropped 28% after rallying 60% between June 18 and June 26. This downswing is basically a mean reversion. Depending on which camp takes control, Avalanche will head in that direction.
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For now, a quick look at AVAX price shows that the buyers are in control as the altcoin has rallied 24% in the last six days and looks like it will continue heading higher. In such a case, investors can expect a retest of $21.47. The push higher, however, could be a lure set by market makers.
The equal lows formed around $15.97 have sell-stop liquidity resting below them, which has been untapped. So, this move to retest $21.47 could be the perfect opportunity for market makers to trap investors going long the altcoin by reversing the ascent and pushing AVAX price lower.
It is recommended interested market participants wait to open long positions after AVAX price sweeps the $15.97 barrier or at the retest of the $14.75 support level.
However, if AVAX price produces a four-hour candlestick above $21.47 and flips it into a support floor, that will invalidate the short-squeeze thesis and suggest instead AVAX price will rally higher and retest the $27.89 barrier.
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