Avalanche (AVAX) has been performing well in its recent trades. The token price rally is near testing a crucial resistance level. It shows buying signals.
However, technical indicators and market experts remain cautious. That’s due to resistance at a trendline and the possibility of a bearish reversal.
AVAX Price Analysis: Bullish Momentum with Resistance Ahead
AVAX’s recent price indicates a strong bullish trend from $22.80, which is near the lower Bollinger Band, to $27.67.
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This rise was earlier on signaled but a bullish candle suggests a possible positive move after a long period of bearish trend.
1-day AVAX trading chart|source TradingvView
If the AVAX price is to continue with its current bullish move, the middle Bollinger Band at $25.98 could offer support.
Bollinger Bands are opening up suggesting higher volatility in AVAX. The last bounce near the lower Bollinger Band pulled the price a little higher towards the upper Bollinger Band at $29.16 indicating short-term resistance. Market analysts anticipate that a pullback or marker consolidation might occur around this level of buying pressure weakens.
The next major resistance for AVAX is at $29.16, and a breakout above this level could mean more gains ahead. However, if the price falls below the middle Bollinger Band at $25.98, then the price may extend downward toward $22.80 which was its previous support level.
As of now, the RSI is at 57.43 showing moderate buy signals with the potential to live higher before it approaches the overbought region that is normally at the 70 mark
Analyst View: Bearish Retest at Trendline Resistance
Analyst Naf pointed out that AVAX is in a bearish retest of a descending trendline that once acted as resistance. After a short rally, the asset is getting selling pressure while testing this resistance area.
This bearish retest indicates that if AVAX price fails to breach this trendline, it could be a signal of a downward price movement.
According to Naf, this bearish pattern could pose potential risks for AVAX despite its recent rebound. The trendline has turned previous support and resistance.
Further failure to climb above the trendline means that there are sellers within this range. This bearish view is quite different from the overall crypto market. Bitcoin (BTC) just touched an ATH in the past few days.
While BTC remains strong and the general market sentiment is bullish, AVAX’s failure to keep up shows a divergence. AVAX continues to struggle with its trendline resistance which has limited its upward move.
Key Support Zone and Buy Signals
On the same chart, there is another strong support level depicted by the orange box at $7 to $10.
https://twitter.com/PaulAtr54799506/status/1854812565085319586
In the past, most of this zone has been characterized by buying signals, not merely one or two, but many “Buy” signals during downtrends. This support zone could help the price rebound if AVAX is put under more selling pressure in the future.
Source|X
During previous correction phases, the price bounced from this level meaning that it was recognized as a buy zone by AVAX investors. However, if the bearish retest at the trendline resistance holds, AVAX could plummet back toward this region and the buyers could ignite the price at this level.
Experts think that this zone is crucial for the AVAX, and it may help avoid more significant losses if there is a large selloff. The near-term attention is still on whether or not AVAX will be able to breach the trendline resistance.
If it does it means there is more potential for more gains, particularly if the sentiment in the market remains bullish in terms of the prices. On the other hand, a breakdown of the trendline might pull AVAX back to lower support levels once again.
