Avalanche (AVAX) Price Surges 56% From November Low, Eyes New Bull Phase
AVAX rises over 50% from its recent low in November, confirming the bullish outlook. The price is getting overextended.
Key Takeaways
- AVAX’s correction to $24 in October marked a key low.
- RSI signals overbought conditions, cautioning against further gains.
- A pullback below $32.70 could lead to bearish momentum.
After reaching a yearly high of $65 in March, Avalanche (AVAX) saw a significant price retracement. AVAX entered a consolidation phase that ended with a breakout in May.
However, recent price movements suggest that AVAX is nearing the end of a downturn, with traders questioning its new bullish potential amid overbought conditions.
AVAX Price Analysis
Avalanche (AVAX) reached its yearly high of $65 on March 18, but by April 13, the price retraced to $30, entering a prolonged consolidation phase.
This phase broke on May 22 with a rise to $41, though AVAX has since declined and may be nearing the final stages of this downturn.
The $65 peak marked the end of a bullish cycle that began in October when AVAX was at $9, forming a five-wave impulse pattern.
Wave analysis suggests that the low on Aug. 5 may have concluded a corrective C wave, with a Relative Strength Index (RSI) reading of 25 signaling a potential bottom for a new uptrend.
After breaking from its upward structure, AVAX hit a low of $24 on Oct. 25, matching the Oct. 3 level, before recovering 13%. The breakout momentum faded, leading to a new low of $22 on Nov. 4.
The following rise presented two possibilities, but the bullish one prevailed as we saw a higher high of $37.50 today, Nov. 12.
Worth noting is that the daily chart Relative Strength Index (RSI) is signaling overbought conditions with a red candle being made. Although the bullish phase is confirmed, will AVAX move to the upside from its current levels?
AVAX Price Prediction
If AVAX has started a new bullish phase following its 74% correction to Aug. 5, it may have completed the first two sub-waves until Nov. 4.
After concluding the five-wave pattern to a $31 high on Sept. 28, the following downturn led to a 0.618 Fibonacci retracement – a typical ending point for corrective waves.
An ABC pattern could be counted, further validating the assumption, and with a strong momentum uptrend following the move, this count was confirmed.
However, today’s high reached the same length as the previous move before traders overbought it, and the price increase became parabolic.
According to the count from Nov. 4, AVAX started wave 3 of the higher degree count, which should proceed to a 1.618 Fibonacci extension level.
This is why, on the expected pullback, we need to see it hold above $32.70 before it makes a higher high of $43.50. Failure to do so could question the bullish projection.
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