Avalanche (AVAX) Price Rebounds 35%, Signaling Possible End of Correction

Key Takeaways

• Avalanche (AVAX) is reclaiming the $20 horizontal support area.
• The AVAX price has possibly completed an A-B-C corrective structure.
• Is Avalanche’s increase a short-term rally or a bullish trend reversal?
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After a steep decline since April 2024, when Stripe integrated the Avalanche C-Chain and its wallet, AVAX reached a temporary bottom of $15.27 on March 11.

While the crypto asset has surged by 35% since, indicating the correction is over, AVAX still needs to reclaim a key horizontal resistance area to confirm this.

Considering that, let’s analyze the charts and see if the rally will continue or if Avalanche’s momentum will lose steam.

AVAX Reclaims Support

The weekly time frame AVAX analysis shows that the price has increased since its low of $15.28 on March 11 (green icon).

The bounce is important since it prevented a breakdown from the $20 horizontal support area, though AVAX has yet to reach a close above it.

This has been the most important horizontal area since 2022, acting as both support and resistance. The trend can be considered bullish, while AVAX trades above it.

Despite this bounce, technical indicators are bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are falling.

Furthermore, both indicators are below their bullish thresholds at 50 and 0, respectively. So, the weekly time frame price action and indicators readings do not align.

AVAX Correction Over?

The wave count gives a more decisively bullish AVAX prediction, suggesting the correction is over.

According to the count, AVAX has completed a five-wave upward movement (green) and A-B-C correction (red).

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As predicted at the beginning of the month, the AVAX price completed wave C at the channel’s support trend line near $14.59.

Waves A and C had the same length, which, combined with the channel’s presence, increases the likelihood that this is the correct count.

The short-term count agrees, showing a finished five-wave downward movement (black), which completes wave C.

After completing it, AVAX broke out from a descending resistance trend line. It now attempts to reclaim the $22 horizontal resistance area.

Technical indicators are bullish. The RSI and MACD generated bullish divergences (orange) before the breakout, confirming its validity.

The daily time frame suggests that AVAX will increase to at least $30.73, reaching the 0.382 Fibonacci retracement resistance level.

This proposed breakout will raise the AVAX price above the channel’s midline, potentially reaching its resistance at $48.

AVAX Begins Reversal

The AVAX price has increased over 35% since its March 11 lows of $15.27, breaking from a resistance trend line.

Avalanche’s weekly and daily time frame price movements are both bullish, supporting the continuation of the increase.

A breakout above $22 can accelerate the AVAX upward movement toward at least $30.67 and possibly $48.