Avalanche (AVAX) Nears $30 Resistance as Bullish Momentum Builds
AVAX close to reaching $30 resistance, but will it break it or will it get rejected?
Key Takeaways
- Avalanche completed a 74% correction, signaling a potential trend reversal.
- Key metrics indicate bullish momentum after hitting oversold levels.
- A move above $21 will confirm the start of an uptrend.
The Avalanche (AVAX) price has experienced significant volatility after peaking at $65 in March. This was followed by a sharp decline and a period of consolidation. Recent technical indicators suggest a potential reversal, with the price possibly entering a new uptrend.
However, key support levels will determine the strength of this bullish phase.
Avalanche Price Analysis
After peaking at $65 on March 18, AVAX experienced a sharp decline to $30 by April 13, followed by 55 days of horizontal trading. This consolidation ended with a breakout above $30, reaching $41 by May 22. Since then, the price has continued its downward trajectory, likely approaching its final leg downward.
The $65 high marked the conclusion of a major uptrend that started at $9 in October of the previous year.
It formed a five-wave impulse in a larger bull cycle, shifting to a correction phase.
Read More: Avalanche Price Prediction 2024: AVAX Price Analysis
Analyzing the wave structure indicates that AVAX likely completed its C wave in an ABC corrective pattern at the Aug. 5 low.
With the daily Relative Strength Index (RSI) hitting an oversold level of 25 and a MACD golden cross forming on Aug. 17, these signals suggest the low is in, and a new uptrend has started.
AVAX Price Prediction
If AVAX is beginning a new bull phase after it ended a 74% correction, it could have been developing the first five-wave pattern.
Although the count has some issues, it could still be valid as a leading diagonal in which wave four can enter the territory of wave two.
After testing the 0.786 Fib level on Sept. 6, we saw a 40% increase, reaching a high of $28.80 on Sept. 20. This could be the final increase in the five-wave sequence, or we could see another minor higher high toward $30 before it ends, which would be a lower degree wave five.
In both cases, AVAX is expected to retrace after the five-wave pattern from Aug. 5 concludes. From the depth of this retracement, we will evaluate the possibility of the starting uptrend.
If it establishes a higher low above $21, that would be a bullish sign.
But if it falls below $21, AVAX could face more downside pressure, leading to lower values than the ones witnessed on Aug. 5.
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