Avalanche (AVAX) has created a higher low and may make another breakout attempt. Recently, a software glitch caused the Avalanche network’s block production process to be suspended for nearly three hours.
Long-term outlook
The price of Avalanche (AVAX) has been in a long-term downtrend since reaching an all-time high of $147 in November 2021. The decline led to a low of $10.7 in early January 2023. The low served to confirm the long-term support area at $10 and helped the price to rebound.
The recovery brought some hope for the bulls as the price broke above the 20-week MA and approached the horizontal resistance area at $21. This is an important development as the 20-week MA is often used to determine the long-term trend.
Although rejected by the $21 area, the price has successfully flipped the 20-week MA as support in the week of March 6-13 and formed a higher low in the form of a bullish pin bar (green arrow). Therefore, the long-term downtrend may have ended.
If so, the Avalanche (AVAX) bulls may make another effort to break above $21 in April. The weekly RSI indicator has created a significant bullish divergence and is trending higher, supporting the breakout potential. The price may then rise to the next resistance area at $31.
Double top pattern
Although the long-term outlook seems positive, the short-term outlook is bearish. Avalanche (AVAX) has created a double top pattern after being rejected by the $21 resistance area. This has triggered a downward movement, pushing the price down to the $14 support area.
After the initial rebound, the price was rejected by the confluence of resistance levels at $17.5. Therefore, the price may retest the $14 area once again.
The RSI indicator supports this potential as it is below 50 and its bearish divergence remains intact.
Conclusion
The long-term downtrend of Avalanche (AVAX) may have ended. However, the price may retest the $14 area before continuing to rise.
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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