Instead, the token formed a long upper wick (red icon) and dropped below this area, indicating a significant change in the price dynamics.
The $10.50 area holds particular importance as the altcoin had been trading above it since 2021. This area has now been confirmed as a formidable resistance.
Previously, the surge in Avalanche’s price was attributed to the successful launch of Stars Arena in late September, which quickly gained trust and popularity among users, resulting in a surge in transactions on the Avalanche network.
However, as reported by BeInCrypto’s editorial team on October 7, attackers exploited the site’s smart contracts and withdrew 266,000 AVAX tokens from the Avalanche network. Subsequently, the company managed to recover 90% of the stolen funds after reaching an agreement with the hacker and implementing a new smart contract.
Avalanche (AVAX) Encounters Resistance at $10.50
Regarding the AVAX price forecast, the risk of a bearish RSI is significant. The weekly Relative Strength Index (RSI) indicates a bearish trend, as it is below the 50 mark (red circle) and is on a downward trajectory.
If the decline persists, the nearest support level is at $4.40, representing a 50% drop from the current price.
Despite these bearish signals, notable traders @VikingXBT and @TheShamdoo are optimistic that the relaunch of Stars Arena will serve as a catalyst for opening new long positions on AVAX in anticipation of a potential return to the $10.50 resistance.
However, it’s essential to acknowledge that, despite the current bearish outlook, a price recovery above $10.50 could potentially trigger a substantial 125% upside move, with the next resistance level standing at $20.50.