Avalanche (AVAX) has emerged as the top performer among the top 20 cryptocurrencies, recording a significant 6% price increase in just the past 24 hours. This impressive gain comes amidst a generally sluggish market, raising questions about whether AVAX can sustain its momentum and potentially reach the $32 mark.

Avalanche’s Strong Performance Against Major Cryptos

Recent data from CoinMarketCap shows that while major cryptocurrencies like Bitcoin and Ethereum experienced only minor price upticks, Avalanche’s price surged substantially. As of the latest figures, AVAX is trading at approximately $23.03, with a market capitalization surpassing $9.33 billion, positioning it as the 12th largest cryptocurrency.

Despite this notable performance, the overall market sentiment around AVAX has not mirrored the bullish price action. According to AMBCrypto’s analysis, which utilized data from Santiment, the weighted sentiment for AVAX has recently dropped. This decline suggests an increase in bearish sentiment among investors, even as the token’s social volume—reflecting its popularity and market interest—remains high.

Divergent Sentiments Among Investors

One of the intriguing aspects of AVAX’s recent price action is the contrast between its short-term performance and long-term investor sentiment. While the immediate market sentiment appears bearish, longer-term holders of AVAX are demonstrating increased confidence. Data from IntoTheBlock reveals that the number of addresses holding AVAX for over a year now exceeds those holding the token for a shorter period of 1-12 months. This shift indicates that long-term investors are optimistic about AVAX’s future prospects, anticipating further price appreciation in the coming weeks or months.

On-Chain Metrics and Market Indicators

To understand whether Avalanche can sustain its bullish momentum, a closer look at its on-chain metrics is necessary. Recent analyses show that following a previous decline, AVAX’s open interest—an indicator of the total number of outstanding contracts in derivatives markets—has started to rise alongside the token’s price. This trend suggests that the likelihood of a continued bull rally is relatively high.

Moreover, selling pressure on AVAX has been easing. Data from DeFiLlama indicates that the netflows for AVAX dropped to -$2.47 million on September 7. Negative netflows generally signal increased buying pressure, which can be interpreted as a bullish indicator for the cryptocurrency.

Retail vs. Whale Activity

Interestingly, while AVAX’s price has been climbing, whale activity has been relatively subdued. Data from Hyblock Capital shows a decline in the whale versus retail delta, falling from over 60 to 44. This metric indicates a shift, with retail investors gaining more market exposure compared to institutional investors or whales.

The technical indicator Relative Strength Index (RSI) also registered a rise, suggesting that the bullish momentum might be sustainable. If AVAX continues on this upward trajectory, it could potentially target $27 as an initial milestone before setting its sights on the $32 mark. Conversely, if the market shifts toward a bearish trend, AVAX could see a drop to around $19.40.

Conclusion

Avalanche’s recent performance is a bright spot in a generally lackluster cryptocurrency market. Its 6% gain over the past 24 hours has placed it ahead of major competitors like Bitcoin and Ethereum. Despite a dip in market sentiment and reduced whale activity, long-term investors are showing increased confidence. The combination of rising open interest, declining selling pressure, and a positive RSI suggests that AVAX might continue to climb.