Avalanche (AVAX) Struggles Below $54 — Consolidation Phase Nearing Its End

Key Takeaways

• AVAX broke out of a descending wedge pattern.
• Resistance at $52.71 remains a critical hurdle.
• Key support levels: $45, $35, and $42.90-$38.98 zone.

After reaching the $52 area in early December, the price stagnated and failed to hold above it, briefly spiking to $55.80 on Dec. 4 before retreating below $50.

The chart indicates overbought conditions, suggesting potential consolidation or a pullback.

Considering that Avalanche (AVAX) attempted to surpass the $54 area for a week, the failure to do so will likely result in a deeper pullback. However, the overall trend is still bullish.

AVAX Price Analysis 

AVAX recently broke out of a descending wedge pattern, signaling a classic bullish reversal and a shift in market sentiment.

The price has faced resistance at $52.71, a key horizontal level that aligns with prior price peaks and may act as a significant short-term hurdle. 

The price stagnated for a week after reaching the $52 area in December. An attempt was made to move above it, spiking to $55.80 on Dec. 4. However, it failed and is now showing signs of struggle, falling below $50. 

On the downside, the nearest psychological and structural support is $45, with additional support at $35, aligning with the wedge breakout zone. 

The Relative Strength Index (RSI) is nearing overbought territory, suggesting the rally might pause or consolidate before resuming its upward trajectory.

If AVAX can break above $52.71 decisively, the next major resistance to watch is $64.81, corresponding to earlier price highs.

Key Observations

Descending Wedge Breakout: AVAX broke out of a descending wedge pattern, confirming a bullish reversal.

Resistance at $52.71: The price faces resistance at this key level, aligned with prior peaks.

Support Levels: Immediate support costs $45, with further support at $35 near the breakout zone.

RSI Overbought: The RSI indicates overbought conditions, suggesting a possible pause or consolidation.

AVAX Price Prediction 

The AVAX hourly chart illustrates a clear impulsive wave structure in line with Elliott Wave Theory, currently in the corrective wave (iv) phase after completing wave (iii) at $55.56.

The recent correction aligns with key Fibonacci retracement levels, indicating potential support zones for the continuation of wave (v). The broader trend remains bullish, with the recent pullback offering an opportunity for the market to regain momentum.

AVAX remains bullish, with the corrective wave (iv) likely to find support near the $42.90–$38.98 zone. A breakout above $55.56 would confirm the continuation of wave (v), with $64.81 as the next major target.

Failure to hold support at $35.07 could signal a deeper correction, but the trend remains positive.

Key Levels to Watch

Support Levels:

$47.73 (0.236 Fib): Initial support for a shallow correction.

$42.90 (0.382 Fib): A critical mid-level support and likely wave (iv) target.

$38.98 (0.5 Fib): Deeper retracement support, aligning with prior consolidation.

$35.07 (0.618 Fib): Key structural support in case of extended corrections.

Resistance Levels:

$55.56: Wave (iii) peak, acting as immediate resistance.

$64.81: Target for wave (v) if the bullish momentum resumes.