Avalanche transcends resistance: Could this mark the onset of an upward surge toward $28.70?
AVALANCHE POISED FOR BULL RUN AFTER BREAKING FREE FROM SIX-MONTH DOWNWARD TREND
Avalanche (AVAX) has recently smashed through a six-month resistance level, indicating a potential bullish reversal that could set the stage for significant price growth.
After being held down by a descending dynamic support/resistance level since February, AVAX has burst through with force. This surge came after a failed breakdown and successful reclaim of important range levels, a common reversal signal. Price action quickly reclaimed both the value area high and the point of control from the previous range, suggesting a strong buyer presence and a potential trend reversal.
Key Points
- AVAX flips dynamic SR resistance into support, signaling a bullish structure.
- Reclaim of value area high and point of control reinforces momentum.
- Next move depends on confirming a higher low above the flipped SR zone.
This breakout is noteworthy not just because it breaks a six-month trendline, but because it happened under favorable market conditions. After a failed attempt to break down and a subsequent reclaim of key level, buyers stepped in with conviction, shifting momentum.
Price action is now aiming for a higher high, and the next critical step is whether AVAX can maintain this breakout and establish a higher low.
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Volume profile readings support this bullish outlook, with an increase in participation during the breakout, adding weight to the idea that this move isn't just a short squeeze, but potentially the start of a lasting uptrend.
If a higher low is confirmed, traders can anticipate a rotation towards the key swing high at $28.70, a level that has previously acted as resistance in past market cycles. Conversely, if AVAX fails to maintain the breakout zone, there's an increased likelihood of a false breakout and a return to the previous range. As such, price action must be closely monitored in the coming days.
What to expect in the coming price action
If AVAX successfully forms a cleaner higher low above the flipped SR resistance, the bullish structure will be confirmed, paving the way for further upward movement towards the $28.70 region. The current market context, which includes reclaimed range levels and strong impulsive momentum, supports this bullish thesis, provided key support continues to hold and volume sustains the breakout.
Factors fuelling the potential bullish reversal
- Resistance Level Breach: AVAX has broken through its six-month resistance trendline, hinting at a strong buyer presence and the potential for a trend reversal.
- Technical Indicators: AVAX's RSI is around 56, suggesting a possible bullish reversal as it moves away from oversold conditions.
- Volume and Participation: The recent breakout was accompanied by increased trading volume, which bolsters the likelihood of a sustained uptrend rather than a short squeeze.
- Chart Patterns: AVAX initially displayed a head and shoulders pattern, which usually signals reversal. However, recent actions have shifted towards bullish structures like the falling wedge and successful breakouts past resistance, highlighting the potential for an upward move.
Challenges ahead
- Sustainability: To maintain the uptrend, AVAX needs to establish a higher low above its recently flipped support/resistance zone.
- Resistance Levels: Overcoming resistance levels, particularly $25-$26 and $28.70, will be crucial for confirming the bullish reversal and ensuring the upward trend continues.
In conclusion, while there are signs pointing towards a bullish reversal for AVAX, the coin's success will depend on maintaining momentum above key support levels and navigating significant resistance.
- The breakout of Avalanche (AVAX) indicates a potential bullish reversal, shattering a six-month resistance trend and setting the stage for significant price growth.
- After a failed breakdown and successful reclaim of important range levels, the reclaimed value area high and point of control suggest strong buyer presence and a potential trend reversal.
- If AVAX can confirm a higher low above the flipped support/resistance zone, it could lead to further upward movement towards the $28.70 region.
- The bullish structure of AVAX is bolstered by increased trading volume during the breakout, suggesting a sustained uptrend rather than a short squeeze.
- Technical indicators such as the RSI being around 56 hint at a possible bullish reversal, as it moves away from oversold conditions.
- To maintain the uptrend, AVAX needs to establish a higher low above its recently flipped support/resistance zone and overcome resistance levels like $25-$26 and $28.70.
- The success of Avalanche (AVAX) will depend on maintaining momentum above key support levels and navigating significant resistance moving forward.
