Avalanche (AVAX) Correction Nears End as Bullish Signals Point to Recovery

Key Takeaways

• Fibonacci resistance zones suggest potential upside targets.
• Elliott Wave correction completion signals a possible trend reversal.
• RSI’s bullish divergence supports a recovery attempt.

As evident from the daily and hourly charts, Avalanche (AVAX) is currently navigating a corrective structure.

The broader trend suggests a complex WXY correction nearing completion, with key Fibonacci levels as pivotal points for potential reversals.

Meanwhile, the shorter time frame highlights a descending channel pattern with a possible breakout on the horizon.

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AVAX Price Analysis

The daily chart shows AVAX has undergone an extended corrective structure since forming a peak at $65 on Mar. 18, 2024. The price has followed a textbook Elliott Wave correction labeled as (WXY). 

The recent move on wave Y toward the $24 region formed a falling wedge structure, aligning with the final leg of this correction. 

The daily Relative Strength Index (RSI) has formed a bullish divergence near oversold conditions, indicating weakening selling pressure.

A descending wedge formation suggests that AVAX is near a potential breakout point. Historically, such patterns tend to resolve to the upside, provided volume supports the move. 

Additionally, Fibonacci retracement levels indicate key resistance at $29.25 (0.236), $36.13 (0.382), and $41.68 (0.5), marking crucial barriers for confirmation of a sustained uptrend.

AVAX needs to break out from the wedge and close above $29.25 for a confirmed reversal. Otherwise, further downsides remain possible, with the $18.14 level (full retracement) as major support.

AVAX Price Prediction

The hourly time frame shows a detailed Elliott Wave structure within a descending wedge.

The wave count suggests that AVAX is in the final stages of an ABCDE correction, with the last leg (wave E) nearing completion.

Before buyers enter, this final wave could briefly dip toward the $20-$18 range.

Once the correction is complete, a breakout above the descending resistance at $26 would be an early indication of a bullish reversal.

A successful breakout could trigger a rally toward the $29.25 resistance level (0.236 Fibonacci), with further potential to reach $36.13 (0.382 Fibonacci). 

Failure to break the above resistance would indicate prolonged consolidation, with AVAX revisiting its $18 support zone before rising toward the $29.25 resistance level (0.236 Fibonacci).

Given that the RSI is forming higher lows despite price stagnation, there is growing momentum for an upward move.

However, confirmation is necessary through a volume surge and a decisive break above $26.

Key Levels to Watch

• Immediate Resistance: $26 (descending trendline).
• Key Resistance: $29.25 (0.236 Fibonacci retracement).
• Major Resistance: $36.13 (0.382 Fibonacci retracement).
• Immediate Support: $22 (local support zone).
• Critical Support: $18.14 (full retracement level).
• Breakout Confirmation: Above $26 signals a bullish reversal.
• Invalidation Zone: Below $18, indicating further downside risk.