The crypto market rallied last week, and AVAX did not disappoint, jumping 22% and outpacing Bitcoin’s (BTC) 7% price increase. The Avalanche team also announced the Avalanche Summit in London between May 20 and 22.
Despite the positive news and price action, AVAX still trades inside the $20 horizontal resistance, an area it has unsuccessfully attempted to flip to support.
After this renewed momentum, can AVAX finally clear this resistance and confirm its bullish trend reversal?
AVAX Price Reaches Resistance
The weekly time frame analysis shows that the AVAX price had traded above the $20 horizontal resistance areas since November 2023.
However, after a trend shift in March 2024 and a lower high in December, AVAX broke down from the $20 area in February 205.
Then, it was confirmed as resistance last month, creating a long upper wick (red icon).
Nevertheless, AVAX regained its footing last week, creating a bullish engulfing candlestick (green icon). The price now trades inside the $20 horizontal area again.
Despite the bounce, technical indicators are not bullish yet. The Relative Strength Index (RSI) is below 50, and the Moving Average Convergence/Divergence (MACD) is negative.
While both indicators trend upward, they must clear their bullish thresholds to confirm the trend reversals.
AVAX Trend Reversal
While the weekly time frame is somewhat undetermined, the daily analysis suggests the AVAX price has started a trend reversal.
There are several reasons for this: Firstly, the price has completed an A-B-C correction (red), in which waves A and C have nearly the same ratio.
The sub-wave count is black, confirming wave C is over.
Want to add AVALANCHE (AVAX) to your portfolio? Discover the leading platforms for buying and selling AVALANCHE (AVAX) on our exchange review page.
Secondly, a descending parallel channel contains the downward movement, another sign that it is corrective.
The ongoing bounce started once the AVAX price bounced at the channel’s support trend line.
Finally, a bullish divergence in the RSI and MACD (orange) preceded the upward movement.
So, the most likely AVAX prediction is an increase toward at least the $23 resistance area or the channel’s midline at $26.
The reaction once it arrives can determine whether the bounce is a relief rally or a bullish trend reversal.
New Highs Incoming
The AVAX price has bounced admirably since its April 7 lows, creating a bullish weekly candlestick.
While the price has yet to reclaim the $20 resistance area, it has confirmed a crucial diagonal support level.
A weekly close above $20 will go a long way in suggesting a bullish trend reversal has started.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Was this Article helpful?
