Strong Rally Potential as Avalanche (AVAX) Price Rebounds from Former Resistance Levels
Avalanche (AVAX) price has confirmed the previous resistance as support and shown decisive bullish signals. It is expected to continue rising in the near future.
The AVAX price has declined since reaching the yearly high at $50, which is slightly below the significant resistance zone at $55. The decline peaked with a low of $27.50 last week, triggering a breakdown from the previous resistance zone at $30.
However, it turned out to be a false breakdown as AVAX bounced up from the 20-week EMA (indicated by the blue arrow), reclaiming the $30 zone and forming a bullish pin bar candle.
Additionally, the 20-week EMA often acts as support for long-term uptrends, so a bounce from it went a long way in confirming the long-term trend to the upside.
The weekly RSI is above 50 and trending upward, supporting the possibility of further gains.
Therefore, AVAX could potentially rise by 54.02% to the significant resistance zone at $55.
Bulls Regain Control
The daily chart shows that AVAX broke out above a descending parallel channel formed since the yearly high.
After the initial breakout, the price confirmed the channel’s resistance line as support yesterday (indicated by the green arrow).
The daily RSI broke above the bearish divergence trendline and rose above the 50 level, indicating that the bulls have regained control.
Hence, AVAX may target the nearest horizontal resistance at $42 in the coming days.
The most likely scenario suggests that Avalanche (AVAX) will continue its upward trajectory. The immediate target is found at $41, with further potential up to $55.
This bullish view would be invalidated if AVAX closes the weekly candle below the 20-week EMA.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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