Avantis [AVNT] was up 24.31% in 24 hours and 34.18% in a week, at press time. Coinalyze data showed that Open Interest was up 74%, a sign of heavy speculative interest.
Source: Coinalyze
Yet, the Funding Rate was deeply negative, a sign that the perpetual contract price is below the spot price. This meant that long positions receive funding to keep their positions open, and also showed a heavily overcrowded short trade.
Could this lead to a short squeeze and further short-term gains? AMBCrypto also examined the long-term trends to understand if the past week’s gains were the beginning of a trend reversal.
The AVNT trend shift is beginning
After making an all-time high at $2.64, just weeks after its launch, AVNT was forced to retrace. The market-wide sell-off in October saw the retracement shift into a downtrend.
Though the altcoin was down 87% from its ATH, there was evidence that the downtrend was ending.
Source: AVNT/USDT on TradingView
The 1-day chart showed a bullish structure shift following the breach of the downtrend’s lower high at $0.334. The shift occurred after three days during which the daily trading volume was well above average.
According to CoinMarketCap data, the daily trading volume was up 265% at the time of writing. The CMF also surged to +0.22 to show heavy capital flows into the market.
The Awesome Oscillator was on the verge of making a bullish crossover. Overall, the indicators and price action showed that the downtrend was about to break.
Examining odds of a possible pullback
Source: CoinGlass
There was a cluster of liquidity at $0.384 and $0.40. These magnetic zones are densely packed with liquidation levels, and quite close to the price. Hence, it is highly likely that the Avantis token reaches these pockets in the coming days.
After this liquidity is cleared, a sharp pullback could potentially erase the past five days’ gains. While possible, this outcome is considered unlikely.
Look to buy AVNT at THIS support
Source: AVNT/USDT on TradingView
The CMF showed a bearish divergence with the price, suggesting a pullback is likely. The $0.333 and the imbalance from the D1 chart at $0.3 are key short-term demand zones that Avantis traders could go long at.
Their next bullish targets would be $0.38 and $0.48. A drop below $0.28 would signal that the token needs time to consolidate before trending higher.
Final Thoughts
- Avantis, the decentralized exchange for RWAs on the Base chain, saw its native token rally 62% in 5 days.
- If the high demand of the past few days is sustained, the multi-week AVNT downtrend could see a trend reversal and token price recovery.
