20% Rally Possible For Avalanche If It Surpasses This Key Resistance Level
Over the past few weeks, Avalanche has made an impressive recovery in its price. Last week alone, AVAX surged by 20%, and on the daily chart, it showed over 4% appreciation. Despite facing a significant decline last month when its price dropped to $14, AVAX managed to rally by almost 50%.
The technical analysis of the asset has pointed to significant bullishness, with buying strength increasing considerably. As demand moved up, so did accumulation. Currently, Avalanche is sitting underneath a crucial resistance level. If it manages to surpass this level, the altcoin could attempt another rally.
However, with Bitcoin still hovering below the $30,000 price mark, most altcoins are also resting under crucial resistance levels. If BTC continues to face downward pressure in the coming days, it could potentially trigger a pullback in AVAX’s price, which could create shorting opportunities for investors. The market capitalization of AVAX also appreciated which indicated an increase in buyers at press time.
Avalanche Price Analysis: One-Day Chart
At the time of writing, AVAX was trading at $21.40 and had successfully surpassed a crucial resistance level of $21, demonstrating bullishness on its chart.
The next major overhead resistance for the altcoin is at $21.60, which has been a multi-month ceiling and is a vital resistance point, given the significant volume of sell orders in that zone.
This area is known as a supply zone, and if AVAX manages to break through it, the price could potentially surge past other resistances and reach $25.
However, if the altcoin fails to overcome this resistance level, it may face a pullback. The support level for AVAX currently stands at $19.60. A drop below that could drag the price down to $16.
Technical Analysis
Following AVAX’s successful trading above the $21 price mark, buyers have gained confidence, driving the altcoin’s price momentum in the market.
The Relative Strength Index (RSI) was nearing 80, indicating overbuying tendencies and suggesting that the altcoin was overvalued at the time of writing. Typically, an overvalued asset experiences a price pullback.
If a pullback were to occur for AVAX, it could briefly fall to $20 before experiencing another appreciation in value. In line with increased demand, the altcoin has moved above the 20 Simple Moving Average line, indicating that buyers are driving the price momentum in the market.
AVAX has been exhibiting bullish indicators that suggest a potential buy signal for the altcoin. The Moving Average Convergence Divergence (MACD) formed green signal bars, which are typically associated with buy signals. This further indicates positive price momentum for AVAX.
Additionally, the Bollinger Bands, which indicate volatility and price fluctuation, have opened up widely. This suggests that the altcoin could experience significant price movement and volatility over the next few trading sessions.
Featured Image From UnSplash, Charts From TradingView.com
Source: NewsBTC.com
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Text source: Crypto Breaking News
