Avalanche (AVAX) Price Targets 35% Rally With Potential 181-Day Channel Break
Avalanche Could of Likely Bottomed Already | Credit: Hameem Sarwar
Key Takeaways
- Avalanche (AVAX) has traded in a parallel channel for 181 days.
- The quarterly Avalanche report showed steady growth.
- Will AVAX finally break out from its long-term correction?
The Avalanche (AVAX)) price has declined since its yearly high in March, falling by 63%. The decrease temporarily halted on Aug. 5, and AVAX created a higher low afterward.
Despite this bounce, AVAX still trades in the confines of its long-term pattern. Can the price break out from it, or will it suffer another rejection instead?
AVAX Attempts Channel Breakout
The daily time frame price action shows that AVAX has fallen inside a descending parallel channel since its yearly high of $65.39 in March.
The decrease led to a low of $17.29 on Aug. 5, validating both the channel’s support trend line and the $19.50 horizontal support area (white icon).
Since then, the price of AVAX has increased, and two attempts have been made to break out from the channel. The attempts, however, have been unsuccessful.
The channel has existed for 181 days so far, and AVAX has made failed breakout attempts (black icons).
Because of the pattern’s duration, a breakout from it will confirm the correction is over, and a new upward movement has started. In that case, the next resistance will be at $32.
While the price action hints toward it, since AVAX trades in the channel’s upper portion and has made numerous breakout attempts, technical indicators are undetermined.
The Relative Strength Index (RSI) and MACD indicator show a neutral trend and hover near 50 and 0, respectively.
So, the daily time frame price action and indicator readings are insufficient to determine the direction of the future trend.
Looking at the wave count and the lower time frame movement could help determine the outcome more clearly.
Avalanche Quarterly Report
The Avalanche quarterly report by Messari was published on Sept. 13. It shows several key growth metrics. More importantly, the amount of staked AVAX grew 6% from the previous quarter and is currently at 254 million AVAX.
Furthermore, the decentralized Finance (DeFi) Total Value Locked (TVL) also grew 11% over the last quarter, increasing by 30.8 million AVAX, despite a broader crypto market correction. Much of this is attributed to the launch of Clearpool, a new credit protocol on Avalanche.
Similarly, stablecoins increased by 13% from the previous quarter, reaching $1.7 billion. Most of this increase was due to USDT, which accounts for 64% of all Avalanche stablecoins.
Has AVAX Bottomed?
The most likely Avalanche crypto wave count shows a completed five-wave increase that started in Oct. 2023. The upward movement ended with the yearly high in March 2024.
After that, AVAX started a W-X-Y corrective structure. In this correction, both waves W:Y (black) and sub-wave A:C (white) had a 1:1 ratio, enhancing the likelihood this is the correct count.
However, the issue with this count is that the increase after the Aug. 5 bottom (highlighted) does not resemble an impulsive movement.
In any case, the proportions of the movements inside the count fit perfectly, making it likely to be accurate.
Moreover, the bounce after the Aug. 5 low could be part of a leading diagonal.
So, if the price of AVAX breaks out from the channel, it will likely confirm the correction is over and first move toward $32 and then toward new highs.
AVAX Price Reversal Incoming
While the daily time frame shows mixed signs, the most likely wave count suggests the correction is over.
If this is the case, AVAX will accelerate its increase above the channel’s resistance trend line, initially targeting $32. Then, AVAX could continue to increase toward new highs.
Avalanche Price Reversal Hints at Further Upside Potential — Can AVAX Hit $30 Next?
