Why Are AVAX Traders Betting on Price Decline Despite Positive Market Indicators

Coin Realm reports:
The activity in the spot market is inconsistent with the bearish expectations of the derivatives market. An increase in open interest may support a continued rise in prices.
After a price plunge a few days ago, Altcoins, including Avalanche [AVAX], managed to hold onto their recent gains. However, AMBCrypto found that traders in the market decided to bet in the opposite direction.
As of press time, the long-to-short ratio for AVAX is 0.88, which is a testament to market sentiment. The long-to-short ratio is a barometer of investor expectations.
To arrive at this result, one must divide the number of long positions by the number of short positions.
Disbelief in the Uptrend
In context, longs refer to traders who predict a price increase and hope to profit from it. Shorts refer to traders betting on a price decline.
When the long-to-short ratio is above 1, it means that the average market participant expects the price to rise.
However, if the ratio is below the threshold, it means that the broader expectation is for the price to fall, which is the case for the token.
At the time of writing, AVAX is trading at $27.44. In the past 24 hours, this figure has increased by 9.09%. Prior to this, the price had dropped to $22.25. Therefore, the aforementioned data indicates that traders expect the value to tilt back towards that region again.
However, according to the Cumulative Volume Delta (CVD) data, this may not happen. CVD displays the quantity of cryptocurrency based on buy and sell orders in the market.
AVAX Aiming for $30
If the CVD is positive, it means that the buying volume in the spot market exceeds the selling volume. However, if the value is negative, it means that there is aggressive selling in the market.
According to AMBCrypto’s analysis, the CVD for AVAX on the daily chart is positive, indicating increased buying pressure.
If this remains unchanged, the price of AVAX could potentially rise to $30, and traders who choose to short the cryptocurrency may not be rewarded.
In addition to the above indicators, AMBCrypto also focused on Open Interest (OI). The idea behind assessing OI is to check whether AVAX will indeed go against the will of derivatives market traders.
As of press time, OI has grown by $267.12 million, just inches away from reaching a market of $300 million. Open interest refers to the total of all open contracts in the market.
When it increases, it means that funds are entering the market, and net positions are also increasing. However, a decrease means a reduction in net positions, as traders withdraw liquidity.
For the price of AVAX, this rise is a good indicator of further increases. Only if it continues, will the situation remain so.
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With capital flowing into the derivatives market, as well as buying pressure in the spot market, the price of cryptocurrency may continue to rise.
If so, the token could reach $30 in a few days. This means that bears will not be rewarded.