Avalanche’s native token, AVAX, has experienced a turbulent week, leaving investors on edge as they watch for the next big move. The token has seen a 15% decline over the past five days, and while Friday brought a slight recovery with a 0.86% increase to $23.39, the token remains far below its July 21 high of $33.06. As AVAX hovers near critical support levels, crypto analysts are spotting potential bullish signals that could indicate a turnaround.
Technical Analysis Hints At A Reversal
One of the most intriguing signs comes from Trade Devils, a well-respected crypto analyst. He has identified a recurring inverse head-and-shoulders pattern in AVAX’s price chart, a formation often linked to an impending rally in the altcoin market. According to Trade Devils, if AVAX can hold above the critical support level of $22.84, a price increase could be on the horizon. However, failure to maintain this level by the week’s end could lead to further selling pressure.
Multiple Indicators Signal Potential Upside
Adding to the optimism, Kingpin Crypto, a leading influencer on X, highlighted that AVAX opened the month at $25.695. He suggests that if AVAX fails to revisit this level, it could indicate a deviation from expected market behavior, potentially signifying weakness. The monthly open often serves as a crucial psychological marker, where traders reassess their positions, making it a key level to watch.
Further technical analysis reveals that the daily Fair Value Gap (D1 FVG) and the 0.618 Fibonacci retracement level, also known as the golden pocket, converge around $22.900. The D1 FVG suggests a potential imbalance between buy and sell orders, indicating that the price might rise to fill this gap. Additionally, an H12 breaker block, which previously acted as a resistance level and now serves as support, reinforces the bullish sentiment. If the bullish momentum continues, AVAX could target the pre-week high at $27.995, a short-term resistance level.
Falling Wedge Formation: A Bullish Signal?
Crypto expert Whales_Crypto_Trading has identified another bullish signal: a falling wedge formation on AVAX’s daily chart. This pattern typically precedes a price reversal, signaling that a price surge could be imminent. Currently, AVAX trades within the confines of this descending wedge, generally indicating weakening selling pressure and the potential for an upside breakout.
Whales_Crypto_Trading anticipates a significant bullish wave once AVAX breaks out of the upper resistance line of the wedge. Should this breakout occur, AVAX could see a price rise to around $65, marking an estimated 105.53% increase from the breakout point.
While AVAX has struggled recently, the convergence of multiple bullish indicators suggests that a significant price movement could be on the horizon. Whether the token will break out or face further declines will largely depend on how it interacts with the current support and resistance levels. As the week progresses, all eyes will be on AVAX, with traders ready to react to the next big move.
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.
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