Avalanche (AVAX) Price Recovers 13% as Buyers Defend Critical Support Zone

Key Takeaways

• Strong rebound from long-term support.
• Possible start of a five-wave impulse.
• RSI signals oversold conditions with bullish divergence.
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Avalanche (AVAX) has been in a prolonged downtrend, but recent price action suggests a possible reversal.

The 4-hour chart reveals an extended corrective wave that might conclude, while the 1-hour chart shows the initial stages of a potential impulsive wave.

If the price structure holds, AVAX could be primed for a significant recovery in the coming days.

AVAX Price Analysis

AVAX has been in a multi-month corrective phase, following a five-wave impulsive structure that peaked around $65.

The decline formed a WXY corrective pattern counted since March 2024, with the recent drop marking wave “Y” completion at approximately $15.20.

This suggests the correction may be reaching exhaustion, opening the possibility for a trend reversal as it quickly regained values above $17.

Fibonacci retracement levels highlight key resistance areas, with the 0.236 retracements at $28.95 being a significant zone to overcome.

The previous corrective waves indicate that AVAX has been following a descending channel structure, with the latest price action testing the lower boundary. A sustained break above this trendline could confirm a bullish reversal.

Relative Strength Index (RSI) readings on the 4-hour chart suggest deeply oversold conditions, adding confluence to the potential bottoming scenario.

However, AVAX must reclaim key resistance zones to confirm a trend shift.

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AVAX Price Prediction

The 1-hour chart suggests the early formation of a five-wave impulse to the upside. The recent low appears to complete a corrective (ABC) structure, aligning with Elliott Wave Theory’s guidelines for trend reversals.

It is considered the ending sub-wave of the higher degree count and is labeled as an E from the ABCDE correction.

Currently, wave (i) of a potential new bullish structure has emerged, with wave (ii) possibly forming a higher low.

If confirmed, wave (iii) could propel AVAX toward the $20-$22 region, targeting the upper descending channel boundary.

The wave structure suggests an ideal scenario where AVAX breaks the channel resistance and establishes a higher trend.

For this bullish outlook to hold, AVAX must sustain above $16.50. If wave (ii) extends lower and breaches this support, the scenario may shift toward further downside.

The RSI on the 1-hour chart shows a slight bullish divergence, indicating waning bearish pressure. A push above $18.50 would further validate the uptrend.

Key Levels to Watch

• Immediate Resistance: $18.50 (recent swing high).
• Key Resistance: $22.00 (descending channel resistance).
• Major Resistance: $28.95 (0.236 Fibonacci retracement).
• Immediate Support: $16.50 (wave (ii) invalidation).
• Critical Support: $14.00 (potential lower low scenario).
• Short-Term Target for Wave (v): $22.00+ if momentum sustains.
• Invalidation Zone: Below $14.00.