Avalanche (AVAX) Price Risks 60% Drop After Closing Below $20

Key Takeaways

• Avalanche (AVAX) created a bearish weekly candlestick.
• The Avalanche price fell below the $20 support area.
• Can AVAX reclaim this area, or are new lows inevitable?
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AVAX rallied over 50% between March 11 and 26, culminating with a high of $23.46. However, the price broke down last week, invalidating its bullish structure.

After last week’s breakdown, Avalanche announced a slew of positive news this week, including launching a new Layer-1 by KOR Protocol , which aims to bring intellectual property to Avalanche.

With that in mind, let’s examine the AVAX price action to see if the breakdown is salvageable or if new lows await in April.

Avalanche’s Failed Rally

The AVAX price has increased since March 11, when it fell to a low of $15.27. The rally led to a high of $23.46 last week, reclaiming the $20 horizontal area.

The $20 support area is critical since it has provided resistance and support since 2022.

While its reclaim was a positive development, AVAX created a bearish candlestick last week (red icon) and has fallen below it since.

Besides the bearish candlestick, weekly time frame technical indicators are also bearish.

The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) trend downward and below 50 and 0, respectively.

If the downward movement continues, the next closest support area will be $11.20.

New AVAX Price Lows

Similarly to the weekly time frame, the daily one gives a bearish AVAX prediction because of the price action and wave count.

The wave count shows an A-B-C correction (red) ongoing since March 2024. If the count is accurate, AVAX is in wave C of this correction.

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The sub-wave count is black, implying that AVAX has another downward movement left before reaching its low. The fall below the $20 support area fits with the start of sub-wave five.

Moreover, a descending parallel channel contains the AVAX price action. Giving waves A and C the same length leads to a low of $7.70, touching the channel’s support trend line.

The weekly and daily time frame readings suggest the AVAX price will continue decreasing in April, possibly falling to single digits.

AVAX Correction Not Over

The AVAX price invalidated its bullish structure by creating a bearish candlestick last week. The $20 horizontal area will likely provide resistance in the future.

Avalanche’s price action and wave count both predict new lows. The closest support levels are at $9.50 and $7.70.