AVAX On The Cusp Of A Major Breakout — Is $15 A Possible Target?
Key Takeaways
- AVAX increased by 30% since October 19.
- It’s at the apex of a major triangle, eyeing a breakout.
- Wave analysis points out a larger upside.
Avalanche (AVAX) has encountered its fair share of challenges throughout the year, trailing behind its crypto counterparts in terms of recovery. While many peers experienced robust rebounds in January and subsequent months, AVAX’s recovery seemed to stall after reaching the $22 mark early in the year.
Subsequently, the token embarked on a downward trajectory, marked by a series of lower highs and lows. This bearish trend led AVAX to establish a new bear market low following the market’s optimistic phase in July, with the token’s value sinking to a dismal $8.65 by September 25, a level not seen since the previous year.
However, the crypto market’s unpredictability came into play. After retesting this low on October 19, AVAX experienced a remarkable resurgence, surging by 32% and currently trading just above the $11 mark. It’s essential to acknowledge that AVAX is currently contending with significant resistance.
With the positive momentum it’s exhibiting, there’s a palpable sense of anticipation. If AVAX can maintain this momentum and break through the resistance, it may be on the cusp of a significant breakout.”
AVAX Price Analysis
Avalanche has undergone a turbulent ride since its record high of $153 on November 21, 2021. During the subsequent bear cycle, the token’s value experienced a significant decline, with the most pronounced drop in April 2022 when it tumbled from $102 to just $13, marking an astonishing 86% reduction in value.
Following this dramatic decline, AVAX’s descent continued, albeit at a more controlled pace. The token consistently marked lower highs and lows. By January 2, 2023, AVAX had retraced to a critical horizontal support zone around the $10 mark, with historical significance dating back to its launch in July 2020 and reaffirmed in mid-2021.
In January 2023, this support zone triggered a recovery, but AVAX struggled to surpass its previous high of $30, set in August 2022. By October, AVAX dipped below this pivotal support zone, potentially to gather liquidity for challenging the formidable descending resistance stemming from its all-time high.
Currently, AVAX stands at the intersection of the horizontal zone’s upper boundary and the descending trendline. A successful breakout here could launch AVAX into a significant upward trend, with initial targets around $15. However, with the right momentum and market conditions, the token might achieve even higher levels, reigniting optimism among investors.
The daily logarithmic chart shows the RSI approaching overbought conditions at the 70% mark, which previously preceded a downturn. This could signal a potential retracement.
The question remains: will AVAX break its most significant resistance point, or are we poised for another downturn?
AVAX Price Prediction
Focusing on the 4-hour chart of AVAX, the downtrend that began on February 3, when the price reached its yearly high of $22.70, has unmistakably come to an end. This is apparent through the completion of a five-wave WXYXZ corrective pattern.
Starting from its September low, there was an initial uptick, yet it encountered resistance at the descending trendline around $11, causing the price to retrace back to its origin. This retracement amounted to a full 100%, aligning with Elliott Wave principles for the initial impulse, emphasizing the importance of avoiding a lower low.
Later, the price retested $8.70 and, on October 19, found support, signaling a potential higher high. Notably, on October 7, the price briefly surged, but the 4-hour candle closed just below $11.
The current high signals a breakthrough of the descending resistance, indicating the beginning of a breakout. These developments strongly suggest the emergence of an uptrend.
If this uptrend scenario holds, we may have already witnessed the first two sub-waves, with the third currently unfolding. This scenario implies a potential ascent to the 1.618 Fibonacci extension level, just below $13. However, this rally may not stop there, as two more waves could push the price towards $15.
Although a sharp downturn is possible if the price encounters strong resistance, current momentum favors an upward trajectory. This hints at the dawn of a significant bull cycle for AVAX.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
