Avalanche has faced intense selling pressure over the past two months, with its price plunging more than 42% since mid-December. The market remains highly volatile, driven by uncertainty, but recent signs of recovery suggest a shift in sentiment. After days of positive price action, AVAX is showing signs of strength, and analysts are watching closely for a potential breakout.
Top analyst Carl Runefelt shared key insights on X, revealing that AVAX has formed another falling wedge on the daily timeframe. This pattern, widely recognized as a bullish reversal indicator, signals that a massive upside move could follow if AVAX breaks out. Runefelt highlights that the breakout target for AVAX is around $56, aligning with key resistance levels.
As the crypto market gears up for a potential bullish phase, Avalanche’s price action in the coming weeks will be crucial. If the wedge formation plays out as expected, AVAX could see a strong rally, attracting renewed investor confidence. However, traders remain cautious, as failure to break above key levels could lead to continued consolidation or even further downside. All eyes are now on Avalanche as it approaches a decisive moment.
Avalanche Eyes Breakout Amid Bearish Market Pressure
Avalanche has shown signs of recovery in the past few days, surging over 13% from a key support level. This move has sparked optimism among investors, but the broader bearish trend that has dominated the market since late December remains a concern. If AVAX fails to reclaim key supply levels as support, the recent gains could be short-lived, and the downtrend may continue.
Top analyst Carl Runefelt shared a technical analysis on X, revealing that AVAX has formed another falling wedge on the daily timeframe. This pattern is widely considered a bullish reversal signal, suggesting a significant breakout could be on the horizon. According to Runefelt, once AVAX breaks out, the target is set at the top of the pattern at $56—an impressive 64% rally from current levels.
However, there are still risks that traders must consider. While a falling wedge breakout could signal the start of a new bullish phase, AVAX must first overcome key resistance levels to confirm a trend reversal. If bulls fail to hold current support levels and push the price above these barriers, AVAX could face further downside pressure.
AVAX Price Faces Key Resistance
Avalanche (AVAX) is currently trading at $34.4 after a highly volatile Friday, where the price surged to $36.1 before retracing the entire daily move. This rapid price swing reflects the uncertainty in the market as AVAX struggles to find direction.
For bulls to confirm a potential reversal, the price must reclaim the $36 mark as soon as possible and establish support above it. Additionally, AVAX needs to hold above the 200-day exponential moving average (EMA) at $34.6, a crucial technical level that could determine the short-term trend. A sustained move above these levels would reinforce bullish sentiment and potentially trigger a rally toward higher resistance zones.
However, failure to hold above the 200-day EMA could result in increased selling pressure, pushing AVAX toward lower demand levels around $31.7. This would signal a continuation of the bearish trend that has dominated the market since mid-December.
With the market still experiencing uncertainty and price swings, the coming days will be crucial for AVAX’s trajectory. If bulls regain control and reclaim key levels, a strong upward move could follow. Otherwise, further consolidation or downside movement remains a possibility.
Featured image from Dall-E, chart from TradingView
Source: NewsBTC