Avalanche shattered a significant resistance level, indicating a bullish trend reversal. The weekly timeframe reveals that AVAX price has been steadily climbing since the rebound on January 22. This upward movement solidified the critical horizontal area as a support level, which had previously acted as resistance since May 2022.
A bullish weekly candle formation sparked the current rally in Avalanche. However, the price failed to break above the 2023 high point.
The Weekly Relative Strength Index (RSI) is giving mixed signals. While the indicator remains above the neutral level of 50, it has been decreasing over the past two months. Furthermore, it crossed the overbought line and has since struggled to regain its position above it.
AVAX Forecast: Will We See a Relief Rally or a Bullish Trend Reversal?
The daily chart does not provide a clear indication of the future direction of Avalanche due to mixed price dynamics. The daily chart shows that the price growth since January 22 is confined within an ascending parallel channel, typically associated with corrective movements.
On February 10, the price rebounded from the resistance trend line of the channel. This rebound coincided with the $40 resistance level.
Meanwhile, the daily RSI is giving bullish signals. It has moved above the 50 mark and entered the bullish territory, showing an upward trend.
According to cryptocurrency trader InmortalCrypto, AVAX price will likely follow the movements of SOL if SOL experiences a pump:
“In case of a $SOL pump, $AVAX will follow it. Muscle memory.”
Given these mixed signals, the price action around the $40 level will be crucial in determining the future trend. A successful bullish breakout could propel AVAX to surge by 23%, reaching a 2023 high of $50.
On the other hand, a rebound from the $40 area and a breakout from the bearish channel could trigger a 16% drop in Avalanche, leading to immediate support at $33.
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