Avalanche (AVAX) price has made a bullish breakout from a short-term bullish pattern in response to news about the project's partnership with Amazon. Now the price is trying to gain a foothold above the $15 area
Amazon Web Services (AWS) Cloud Computing Platform Will Work With Ava Labs Project To Drive Broader Adoption Of Blockchain Technology By Businesses, Institutions, And Governments, As It Was Revealed On January 11. Through the partnership, developers will be able to more easily run and manage nodes on the Avalanche blockchain as AWS will support the Avalanche infrastructure and decentralized applications (dApps).
In response to this news, the AVAX exchange rate accelerated the growth rate, which began on December 31. According to CoinGeko, the token has risen in price by more than 23% in a day.
AVAX: potential bullish breakout
According to the results of technical analysis, the token has been declining along the descending resistance line since August 8. As a result, the price has made a bearish breakout of the $15 horizontal support area, which has been on the chart since June.
Despite the decline, technical indicators give bullish signals. So, this is clearly indicated by the bullish divergence of the RSI (green line) and the bullish breakdown of the descending resistance line (black).
In addition, on January 8, the AVAX price broke through the descending resistance line. After that, three days later, the pace of growth accelerated, and the price recovered above the $15 area.. If the bulls manage to turn this level into support, the next resistance will come into play in the area between $18.43 and $20.83 (Fibo levels 0.382 and 0.5 retracements).
On the other hand, a price drop below this resistance line will indicate the failure of the previous bullish breakout.
Source: TradingView AVAX Short Term Price Forecasts
The 4-hour chart shows that on January 11, the coin made a bullish breakout from the falling wedge pattern.. Now it is trading in the area of Fibo resistance levels of 0.5-0.618 correction ($15.61 – $16.79).
A successful advance above this area will confirm a bullish reversal.. If the market fails, then the price may again test the $14 support area.
The first storm attempt resulted in AVAX bouncing, but the coin did not close below this resistance area, indicating the possibility of a new breakout attempt.
Source: Trading View
An even shorter hourly timeframe also supports continued upside potential. It looks like AVAX has started the third, extended wave of the five-wave bullish structure (black). The results of the subwave analysis are shown in red.. They demonstrate that the price is correcting in sub-wave 4. If this analysis is correct, then AVAX should reach a new high, strengthening towards $17.36 (Fibo level 3.61 extension), after which the market will begin a more significant correction.
As for the extreme levels of the entire price move, the area of $18.43-$20.83 that we highlighted earlier seems to be an ideal level for the formation of a top.
Absorption of the high of sub-wave 1 at $12.95 (red line) will cancel this bullish scenario.
Source: Trading View
Thus, the short-term price outlook for AVAX is bullish due to the bullish breakout from the descending wedge.. A successful recovery above the $15 area will signal that the longer-term trend is also bullish.
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