AVNT surged strongly in the short term as Open Interest skyrocketed and the Funding Rate was deeply negative, raising the possibility of a short squeeze and opening up reversal signals after a long downtrend.
Avantis's bullish momentum is accompanied by signs of high speculation in the derivatives market. If the flow of money and trading demand is maintained, volatility around key liquidity and support areas may determine whether the recovery trend becomes sustainable or just a short-term increase.
MAIN CONTENT
AVNT surged strongly, with Open Interest increasing by 74% in 24 hours, while the deeply negative Funding Rate indicates crowded short positions.
The D1 price structure shows a signal of a shift to bullish after breaking the important lower high around 0.334 USD.
The liquidity area of 0.384–0.40 USD may be “swept” first, then we need to monitor for a pullback to 0.333–0.30 USD and the risk of breaking below 0.28 USD.
AVNT shows signs of beginning to reverse the trend.
On the 1-day timeframe, AVNT shows signals of a structural shift to bullish after breaking the lower high of the downtrend at 0.334 USD, accompanied by unusually high trading volume.
After reaching an all-time high of 2.64 USD just weeks after its launch, AVNT entered a correction phase. The widespread sell-off in October caused the rebound to turn into a clear downtrend.
At the time mentioned in the original data, AVNT had dropped about 87% compared to ATH, but the risk of “ending the downtrend” began to appear. On the D1 chart, the break of the lower high area of 0.334 USD occurred after 3 days of trading volume significantly higher than average.
According to CoinMarketCap data, the trading volume/day increased by 265% at the time of recording. CMF also rose to +0.22, reflecting a stronger influx of capital into the market.
The Awesome Oscillator indicator is described as approaching a bullish crossover. When combined with CMF and price structure, these signals support the weakening multi-week downtrend scenario that may be broken.
Open Interest has surged, but with a deeply negative Funding Rate, the risk of a short squeeze increases.
Open Interest increased by 74% while the Funding Rate is deeply negative, indicating high speculative activity and that short positions may be too crowded, creating conditions for a short squeeze if prices continue to push up.
In 24 hours, AVNT increased by 24.31% and 34.18% in 7 days at the time mentioned. Coinalyze data recorded a 74% increase in Open Interest, often a signal of rapidly increasing open derivative positions.
However, the “deeply negative” Funding Rate indicates that perpetual contracts are trading below spot prices. In this context, the long side receives funding to maintain positions, while also implying that short trading is more “crowded” than usual.
When many short positions are concentrated, simply increasing the price and hitting levels that cause shorts to be liquidated can force buying pressure to push prices up quickly in a short time. However, high Open Interest also means volatility can be large in both directions if the market reverses.
The liquidity area of 0.384–0.40 USD may attract prices for a few days.
The liquidity cluster around 0.384 and 0.40 USD is a “magnet” area with many liquidation levels, so AVNT has a high probability of moving towards it before a correction occurs.
Liquidity areas often concentrate order density and liquidation levels. The original content specifies that there is a liquidity cluster at 0.384 USD and 0.40 USD, quite close to the price at the time of analysis.
Due to the short distance and dense liquidation, the AVNT scenario reaching these “pockets” in the coming days is assessed as “very likely.” In actual trading, this often occurs when the market seeks liquidity to fill orders, especially during strong upward phases.
After these areas are swept, a strong pullback risk may arise. The original content notes that a sharp correction could erase the gains of the last 5 days, although this scenario is considered less likely than a continuation of the rise.
The support area of 0.333–0.30 USD is a region to watch for trend-following purchases.
If AVNT corrects, the areas of 0.333 USD and the imbalance area around 0.30 USD are noteworthy short-term demand zones; breaking below 0.28 USD may signal the need for further accumulation before continuing to rise.
Despite a strong CMF increase, the original content also points out a bearish divergence between CMF and price, implying a potential short-term pullback. This type of divergence often occurs when prices rise faster than the flow of money, causing momentum to weaken temporarily.
The two stated areas are 0.333 USD and the “imbalance” area on the D1 around 0.30 USD. This is seen as a demand/support area where traders can consider trend-following strategies (long) if a clear price reaction occurs.
The next target increase is stated as 0.38 USD and 0.48 USD. Conversely, if the price drops below 0.28 USD, the signal is that the token may need more time to move sideways/accumulate before forming a more sustainable upward trend.
Conclusion
Avantis is a decentralized exchange (DEX) for RWAs on Base, and the AVNT token has increased by 62% in 5 days according to the original content. If the recent high demand is maintained, the multi-week downtrend may reverse, supporting the price recovery scenario.
Frequently Asked Questions
What does AVNT's deeply negative Funding Rate indicate?
A deeply negative Funding Rate often indicates that perpetual contract prices are lower than spot prices, with the long side receiving funding. This may also reflect that short positions are becoming “crowded,” increasing the risk of a short squeeze if prices continue to rise.
Does a 74% increase in Open Interest signal a certain price increase?
No. The increase in Open Interest indicates more new derivative positions and higher speculative levels, but does not confirm direction. If accompanied by rising prices and crowded short positions, it may support an upward trend; conversely, it may also cause significant volatility when the market reverses.
Why is the area of 0.384–0.40 USD considered an important “liquidity zone”?
The original content describes this as a liquidity cluster with many dense liquidation levels located close to the price, thus tending to “attract” the price to sweep liquidity. After the sweep, the market may sometimes clarify the continuation trend or correction.
Which areas should be monitored if AVNT corrects to find entry points?
The stated levels are 0.333 USD and the imbalance area around 0.30 USD on the D1 timeframe. This is a potential short-term demand area; if it breaks 0.28 USD, a reasonable scenario is that more accumulation time is needed before further increases.
Source: https://tintucbitcoin.com/avnt-tang-24-len-040-usd/
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