In the midst of a recovering crypto market, marked by significant jumps in the prices of Bitcoin (BTC) and Ethereum (ETH) by 1.88% and 2.22% respectively, another cryptocurrency is catching the attention of investors.
AVAX, the native token of Avalanche, has recently experienced a halt in its declining price trend, challenging a resistance trendline. However, amidst this backdrop, there are promising signs of a potential reversal that could offer an attractive buying opportunity.
Key Takeaways:
- The correction phase for Avalanche halts at $14 with a potential double bottom formation.
- A trendline breakout can help AVAX investors ride a breakneck bull run.
- The 24-hour trading volume in the AVAX is $4.94 Billion.
Source – TradingView
The AVAX price trend shows a declining movement over the past month creating a resistance trendline in the daily chart. The downtrend has caused 30% damage to the crypto within 30 days.
After breaching the crucial support level of $15, the falling price of AVAX found support at $14, where buyers stepped in and triggered a reversal. This resulted in an overnight growth of 2.50%, demonstrating the resilience of the buyers in cushioning the fall and driving the price upward.
The reversal was further confirmed by a bullish engulfing candle, indicating a shift in momentum. As of now, AVAX is trading at $14.76, experiencing an intraday growth of 0.60%. These recent price movements highlight the potential for a recovery in AVAX’s value.
The recent reversal from $14 suggests a potential double-bottom formation in AVAX’s price chart, with a neckline at the $21.50 supply zone. This indicates a potential bullish trend ahead. However, for the reversal to fully materialize and reach the neckline, it requires sustained momentum and increased trading volume.
The daily chart analysis reveals that AVAX has crucial support levels at $12 and $10.5 while facing resistance levels at $16 and $18 before reaching the neckline at $21.50. These levels play a significant role in understanding AVAX’s potential movements and are important reference points for traders and investors.
Technical Indicator:
Stochastic Indicator: The Stochastic lines give an uptick from the oversold region and give a bullish crossover, hinting at a release of a long build-up in the bullish momentum.
RSI indicator: The RSI line spikes from the oversold boundary line reflecting a recovery in bullish strength.
MACD: The MACD lines prepare for a bullish crossover as they head slowly to the zero line. Therefore, the overall signal from the technical indicators remains bullish and gives a buy signal for Avalanche(AVAX).
Recommendation:
Avalanche price action shows a high possibility of a reversal after a halt at $14. The bullish reversal can lead to the trendline breakout forming in the AVAX daily chart. It will bolster the social sentiment and help sideline buyers enter new bullish positions.
However, traders should wait for a candle to close above the resistance trendline before taking a bullish entry. The breakout rally will most certainly rechallenge the $18 level in an attempt to complete the double bottom.
And, if the case goes against Avalanche’s favor, the chances of a prolonged selling spree will result in AVAX prices taking a nosedive to reach $12.
Vishal Dixit, a Mumbai-based crypto writer and analyst, excels in crafting engaging, SEO-friendly crypto-related content. His key strengths lie in technical and fundamental analysis of stocks and cryptocurrencies, alongside a robust understanding of content strategy and management systems. His interests extend beyond crypto to chess, movies, gym, and trekking, reflecting his multi-dimensional personality.
