AVAX Inches Toward $17, But Traders Remain Cautious on Leverage

Avalanche (AVAX) has tentatively broken through a key resistance line, holding steady above $14 after an 8% rally over two consecutive trading sessions. The technical setup looks promising on paper—RSI showing bullish divergence, Supertrend potentially flipping bullish near $15.89, and the 50-day EMA at $17.14 offering the next major target. But here’s the rub: futures markets are telling a different story.

The Leverage Puzzle: Why Traders Are Sitting Out

Open interest in AVAX perpetuals remains underwater at $592.81 million, barely inching up from $562.17 million the day before. Compare that to pre-crash levels around $1.45 billion in early October, and you see a market still licking its wounds from the October 10 liquidation cascade.

The price action-leverage mismatch is telling. While spot buyers are stepping up, the derivatives crowd is keeping their powder dry. This “wait-and-see” posture suggests institutional traders want to see the breakout hold before committing serious capital. It’s a classic validation game: prove the momentum first, then we’ll leverage up.

The Chart Wants Higher Prices

From a technical standpoint, the bulls have cleared the descending trendline that was capping AVAX’s upside. The next hurdle sits at $14.77—Friday’s high. Clear that, and the road opens toward $17.14, where the 50-day EMA sits. Reclaiming this level is viewed by many algorithmic desks as the inflection point where the medium-term trend rotates from distribution to accumulation.

The RSI at 46 is climbing steadily from oversold, and the bullish divergence versus the November 21 low of $12.57 is a textbook reversal signal. Push through $15.89 and the Supertrend flips to buy—a momentum trigger that could accelerate the move.

The Other Side of the Coin

Rejection at $14.77 would be ugly. A failed break here sends AVAX back to defend $12.57, and all the recent optimism evaporates. The market is literally trapped between $14.77 and $15.89 right now—call it the “proof zone.” One side has to give, and the volume that comes with that breakout will determine which way.

The wild card remains regulatory—a Bitwise Avalanche ETF approval would bring fresh institutional bid, but that’s down the line. For now, AVAX is playing a patient game. The pattern is tentatively constructive, but conviction is still building.