Avalanche Breaks $26 Resistance Amid Rising Volatility and Liquidity Pressure

Avalanche (AVAX) has recently surged past the critical $26 resistance level on July 29, 2025, following months of sideways consolidation. This breakout is seen as a reversal setup, backed by strong buyer interest and a notable spike in trading volume. The price now trades near $28, testing a liquidity cluster that could influence the short-term volatility of the asset [1].

The breakout above $26 was preceded by two distinct double-bottom formations around $14.50 and $15.50, indicating a period of accumulation. During the breakout, volume reached a peak of 1.24 million, signaling strong conviction among buyers. AVAX has since created higher lows on dips, a pattern that suggests sustained demand and a potential shift in trend [1].

As AVAX approaches the $27–$28 liquidity zone, the asset faces heightened volatility risk. This area is characterized by a concentration of long positions, which could lead to price shakeouts due to liquidation pressure. Heatmap data reveals orange bands near $28 and red bars above $26, representing over $1 billion in long liquidation volume. These dynamics underscore the potential for sharp price swings in the near term [1].

Additionally, the Normalized Risk Metric (NRM) for AVAX is currently at 0.82, the highest level since January 2025. This reading aligns with previous market tops and signals an overheated market environment, increasing the risk of short-term corrections. Traders are advised to exercise caution and consider profit-taking strategies to manage exposure in this volatile phase [1].

Key support for AVAX remains solid around $25, offering a potential foundation for upward momentum. Resistance is expected near $33–$35, where increased selling pressure may emerge. Technical analysis suggests that an inverse head-and-shoulders pattern could project a breakout target between $35 and $45, contingent on maintaining momentum above $25. Traders should closely monitor liquidity and volume levels for confirmation before expecting a sustained rally [1].

The current price action highlights a critical juncture for AVAX. While the breakout above $26 marks a significant technical shift, the presence of liquidity clusters and a high NRM reading emphasize the increased risks of volatility. Market participants are encouraged to track key support and resistance levels and remain mindful of the broader risk signals in place. As AVAX navigates this pivotal period, ongoing analysis will be crucial in assessing the strength of the upward trend and the likelihood of further corrections [1].

Source: [1]Avalanche (AVAX) Tests Key Liquidity Near $28 Amid Rising Risk and Reversal Signals (https://en.coinotag.com/avalanche-avax-tests-key-liquidity-near-28-amid-rising-risk-and-reversal-signals/)