Key Takeaways
- AVAX maintains strong support above $20 since early May, currently trading around $23.55 with steady upward momentum.
- Weekly chart breakout from a falling wedge indicates reversal, with AVAX breaking above resistance and bears losing control.
- The daily chart shows AVAX in an ascending triangle, a bullish pattern setting up potential breakout toward the $35 resistance.
Avalanche (AVAX) has held strong above $20 since May 10 and now looks ready to chase a new milestone. At press time, AVAX price is trading at $23.55, up a modest 4.25% over the past week.
While the climb has been gradual, there’s little sign of downward pressure threatening to pull the altcoin back. In this analysis, CCN breaks down why AVAX could be gearing up for a bigger move and what key indicators reveal about its short-term potential.
AVAX Bulls Still in Control
On the weekly chart, AVAX has decisively broken out of a falling wedge, a pattern viewed as a bullish reversal sign. As seen below, the pattern started with AVAX price hitting lower highs and lower lows.
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Then, the trendlines indicating support (the lower one) and resistance (the upper line) narrowed to form the wedge. Today, the cryptocurrency has broken above the upper trendline of the wedge, indicating that bears no longer have control over the short-term direction.
Zooming into the same chart, we observed that the Awesome Oscillator (AO) has flashed green histogram bars despite having a negative reading. This position indicates that AVAX’s momentum is switching from bearish to bullish.
If sustained, bulls might keep defending the support at $20.12, enabling AVAX’s price to flirt with the resistance at $35.83.
AVAX Price Analysis: Structure Aligns for Breakout
Like the weekly chart, the AVAX/USD daily chart also presents a bullish setup. From the chart below, AVAX price is trading within an ascending triangle while hitting lower highs.
An ascending triangle is a bullish continuation pattern formed during an uptrend and indicates a potential breakout to the upside. As shown below, AVAX is trading near the upper resistance line.
At the same time, the rising lower support line is progressively moving higher, forming a rising trendline.
If sustained, the cryptocurrency is unlikely to drop below the underlying support. For AVAX, the next move could be to break above the resistance line near $25.
Amid this move, the Relative Strength Index (RSI) has resisted dropping below the neutral line. If that had happened, this bullish bias would have been invalidated.
Since that is not the case, AVAX’s price is likely to breach the upper resistance at $30.45, positioned near the 0.618 golden ratio.
Once successful, the market value of the cryptocurrency might jump to $35 at the 0.50 Fibonacci level. In a highly bullish market condition, this could set the stage for a run toward $40.
On the contrary, if the altcoin fails to break above the resistance, this forecast might be rendered null and void. If that were to happen, AVAX might slide below $15.
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.
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