AVAX jumps 8% as short squeeze and altcoin inflows drive breakout

Technical breakout pushes AVAX higher

AVAX managed to break above a descending channel on the 4-hour chart, ending a multi-week period of price consolidation. Trading volume climbed 59% to $377 million over 24 hours, indicating increased buying interest.

Avalanche is a layer-1 blockchain platform designed to host decentralized applications and custom blockchain networks. Its native cryptocurrency, AVAX, serves as both a utility and governance token for the network.

The 14-day Relative Strength Index rose sharply to 69, reflecting intensifying bullish momentum. The Moving Average Convergence Divergence indicator, or MACD, also flipped positive, providing further confirmation of short-term trend reversal.

These combined signals suggest that buyers pushed AVAX past key resistance with notable volume, rather than on thin trading activity. Eyes are now on a potential daily close above $6.76 to $6.84, the recent highs, which could confirm the strength of the move and potentially extend the rally.

Short squeeze and altcoin rotation factor in

Speculation around a short squeeze grew as AVAX’s price sharply diverged from the broader market. Social media users cited a 93% rate of short liquidations, fueling discussion about traders who bet against AVAX getting caught on the wrong side of the move.

The CMC Altcoin Season Index climbed 7.27% to 59, suggesting fresh capital is shifting from Bitcoin into altcoins such as AVAX.

Market analyst Alex Marzell noted that AVAX ran from $6.14 to a new 15-day high of $6.84, marking it as the strongest major digital asset of the day. Marzell identified the former range high near $6.73 as a critical level to watch, with the potential for further gains if this level is maintained.

AVAX led the major cryptocurrencies, advancing from $6.14 to $6.84, a 15-day high. The old range high near $6.73 is now essential; holding above it could mean continued strength, but a drop below may point to the move being primarily a short squeeze.

Key levels and outlook

Short-term price direction for AVAX now depends on whether it can hold above the $6.30 to $6.55 support zone, which previously acted as resistance. Sustaining this level could open a move toward $7.20, while a drop below $6.10 would invalidate the breakout and increase the odds of revisiting lower support.

Analyst CryptoGuru12 outlined a trading strategy with an entry region of $6.52 to $6.58, a stop loss at $6.15, and take-profit levels at $6.75, $7.00, and $7.35, as long as momentum persists.

AVAX is showing a strong rebound, with buyers attempting to push through recent resistance. If this breakout holds, another leg higher could follow, according to some traders.

CoinGecko’s latest figures place AVAX at $6.70 with 24-hour trading volume near $293 million, marking a 6.99% daily and a 3.30% weekly gain. Despite the rebound, the weekly chart remains in a longer-term downtrend, and analysts say a reversal would require a close above $10.20, which remains a distant target.