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After enduring a substantial price decline of over 70%, the cryptocurrency Avalanche [AVAX] is showing strong indications of a potential bullish reversal. This optimistic outlook is fueled by recent price action and a notable surge in interest from both traders and large-scale investors.
Whale Activity Signals Growing Confidence in AVAX
On-chain data from IntoTheBlock reveals a remarkable 169% jump in large transaction volume for AVAX. This significant increase in activity from whales and major investors suggests growing confidence in the asset’s future prospects. Typically, a spike in large transactions coinciding with a breakout from a bearish pattern can be interpreted as a strong bullish signal, indicating that significant capital is being deployed to accumulate the asset. This heightened participation underscores the increasing conviction among key market players regarding AVAX’s potential for an upward trajectory.
Technical Analysis Points to Bullish Breakout Potential
Technical analysis from AMBCrypto further supports the bullish speculation surrounding AVAX. On the weekly chart, the cryptocurrency appears to be emerging from a descending channel pattern, reinforced by a strong bullish engulfing candlestick. Shifting to the daily timeframe, AVAX has already broken out of another descending channel and is now nearing a breakout from a bullish cup and handle pattern. This confluence of bullish patterns across different timeframes suggests significant upside potential if the asset can overcome key resistance levels. Specifically, the daily chart indicates that AVAX is trading near the neckline of the cup and handle formation, a critical juncture that could determine the immediate future price direction.
Key Price Levels to Watch for Sustained Bullish Momentum
Currently trading near $20.05, AVAX faces a crucial test at the $21 level. According to technical analysis, a decisive break and daily candle close above this point could trigger an initial rally of approximately 21%, potentially pushing the price towards $25.15. Should the bullish momentum persist, analysts suggest a further 25% climb could follow, targeting the $31.40 mark in the near term.
Also Read: Avalanche (AVAX) Leads Top-10 Crypto Ecosystems with 16% Surge Despite TVL Decline
While the Relative Strength Index (RSI) currently sits comfortably in bullish territory, indicating room for further gains, the price remains below the 200 Exponential Moving Average (EMA), suggesting underlying downtrend momentum still needs to be overcome. Therefore, the confirmation of a daily close above $21 is essential to validate the bullish thesis and pave the way for the anticipated upside rally.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
