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Analysis

Assessing AVAX’s odds of another bull run before a trend reversal

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Source: Canva


Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

Since striking its ATH on 21 November, Avalanche (AVAX) was on a steep downtrend while marking a four-month-long trendline resistance that the bulls recently flipped to support.

A convincing close above the $86 long-term liquidity range (Point of Control/POC) could put AVAX in a position to test the $89-90 range before facing resistance at that level. At press time, AVAX traded at $86.52, up by 3.02% in the last 24 hours.

AVAX 4-hour Chart

Source: TradingView, AVAX/USDT

Since attaining its lifetime milestone, AVAX lost more than 64% of its value and plunged towards its 14-week low on 22 January. Since then, it recovered its losses but struggled to topple its trendline resistance (white, dashed).

The recent rising wedge (white) led the alt to jump above its 20/50/200 EMA as the bulls regained thrust. Between 14 to 20 March, AVAX saw a staggering 40% ROI. This rally managed to break its long-term trendline resistance (now support). 

Considering the sturdiness of the $83-support and the 50 EMA, the alt could see a compelling close above its POC. In which case, it would position itself for a $90-zone retest before a possible pullback. If the 20 EMA manages to jump the POC, the buyers could aim to test the upper trendline of the rising wedge. Should the rejection of higher prices occur from here, AVAX would likely maintain its squeeze phase between the $83-$86 range.

Rationale

Source: TradingView, AVAX/USDT

The RSI seemed hopeful after finally finding a close above the equilibrium from its 45-floor. Thus, the bulls claimed a minor advantage in the current momentum. Furthermore, the OBV maintained its support base while the price kept marking lower troughs. This trajectory revealed a rather weak bullish divergence on its 4-hour chart.  

Nevertheless, the CMF was on a downslide and confirmed the increasing money outflows from the crypto. A revival from its immediate support could ignite the possibilities of a hidden bullish divergence.  

Conclusion

Considering the underlying improvement on its technicals, a possible close above the POC would brace AVAX for a test of the $90-mark. In case of a bullish invalidation, the alt would likely continue its low volatility phase.

Besides, broader sentiment analysis with the on-chain developments needs to be taken into consideration to make a profitable move.

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With a background in financial analysis and reporting, Yash is a full-time journalist at AMBCrypto. He has a keen interest in blockchain technology, with a primary focus on technical analysis of cryptocurrencies.

Disclaimer: AMBCrypto's content is meant to be informational in nature and should not be interpreted as investment advice. Trading, buying or selling cryptocurrencies should be considered a high-risk investment and every reader is advised to do their own research before making any decisions.