AVAX Headed To $30? Avalanche Declined 15% In 8 Days, Failing To Break $40 Resistance

Key Takeaways

• AVAX’s price stabilized at around $35 after a 55% drop.
• Brief breakout to $41, returned to trading around $36.
• The potential for a new uptrend or further correction remains.

Since April 13, after experiencing a 55% drop, the Avalanche (AVAX) price has mostly stabilized around $35. On May 15, it dipped to $31, testing its lower support level, but soon rebounded, pushing past the $40 resistance and exiting the consolidation zone.

However, after briefly reaching $41 on May 22, a downturn followed, and the price of AVAX is now back below it, trading at $36. 

AVAX Price Analysis

Following a peak of $65 on March 18, AVAX‘s price began a steep decline, eventually bottoming out at $30 on April 13. This initiated a 46-day period of sideways trading. This consolidation phase ended positively, with a breakout above the $40 level from the formed symmetrical triangle. 

This recent peak concluded a major uptrend that began at $9 in October of the previous year. It was part of a five-wave impulse suggesting a larger bull cycle. However, it transitioned into a correction phase.

While AVAX has been trading horizontally, a sustained move above $40 indicates potential upward momentum. Further declines may occur until this breakout is confirmed, but the overall trend could remain bullish.

AVAX Price Prediction

Zooming into the 4-hour chart and examining the wave structure in more detail, we can see that two scenarios are possible. AVAX might be initiating a new bull phase, potentially reaching new highs, or it could still be in a corrective phase with another significant drop impending.

If AVAX continues to rise above $50 and forms a higher high, a five-wave pattern would emerge, and an ascending triangle would be validated. That would mean AVAX commenced a new uptrend, with its first sub-wave being the leading diagonal. 

After a short retracement for a higher low, the price could continue climbing with stronger momentum and make up for all the gains previously lost. 

Conversely, if AVAX faces rejection and falls back to $30, it could suggest that buyers lack the strength to sustain higher prices, potentially leading to a decline similar in magnitude to the earlier drop, targeting around $23.

These two outcomes differ in the meaning behind the sideways move from April 13. If this is the starting uptrend, it should confirm its bullishness with another higher high and a higher low. However, reverting to $30 would mean the structure was corrective, and further lows would look more likely.