- Avalanche (AVAX) witnessed a significant shift in momentum after a prolonged period of price decline.
- Several metrics indicate a potential breakout, sparking optimism among investors.
- AVAX’s price movements suggest the formation of a bullish pattern, hinting at a possible rally.
Avalanche (AVAX) poised for a potential surge as bullish patterns emerge and investor confidence grows.
AVAX Breaks Month-Long Decline with Green Daily Chart
After experiencing a double-digit price decline for over a month, Avalanche’s (AVAX) daily chart finally turned green. The token, which saw a price drop of more than 18% in the previous month, showed signs of recovery as it consolidated within a specific pattern. As of now, AVAX is trading at $26.15, boasting a market capitalization of over $10 billion, which ranks it as the 13th largest cryptocurrency.
Investor Sentiment and Long-Term Holder Confidence
Analysis from COINOTAG and IntoTheBlock indicates a growing confidence among long-term holders of AVAX. The number of addresses holding the token for over a year has been rising, signaling that investors anticipate a substantial price increase. This trend reflects a positive outlook, despite recent market bearishness.
Bullish Patterns and Technical Indicators
Crypto analyst Captain Faibik recently highlighted a bullish falling wedge pattern forming in AVAX’s price chart. This pattern, which developed earlier this year, suggests a potential breakout that could trigger an impressive rally. According to Faibik, a successful breakout might lead to a significant price increase, potentially elevating AVAX into the top 10 cryptocurrencies by market cap.
On-Chain Data and Market Sentiment
Further analysis of on-chain data from Santiment reveals that AVAX’s weighted sentiment remains negative, reflecting the prevailing bearish sentiment in the market. However, the token’s funding rate showed a decline on July 14, which often precedes a price movement in the opposite direction. This trend hints at an impending price increase and supports the possibility of a breakout above the bullish pattern.
Technical Indicators Support Bullish Outlook
Key technical indicators also provide a bullish outlook for AVAX. The Moving Average Convergence Divergence (MACD) indicator displays a bullish tendency, while the Relative Strength Index (RSI) has registered an uptick. These signals further suggest that AVAX might be on the verge of a bull rally. Nevertheless, the Chaikin Money Flow (CMF) indicator presents a contrasting view as it trends downward.
Potential Price Targets and Scenarios
Should AVAX embark on a bull rally, the token might first encounter resistance around the $27.9 mark, where increased liquidation is expected. A breakout above this level could propel AVAX towards the $30 mark within the week. Conversely, if bearish forces prevail, the price may retreat to $24, indicating a need for cautious optimism among traders.
Conclusion
In summary, Avalanche (AVAX) is exhibiting promising signs of a potential breakout after a month-long decline. Rising confidence among long-term holders, coupled with bullish technical patterns and indicators, suggests that the token could be primed for a significant rally. Investors should closely monitor AVAX’s price movements and on-chain metrics to navigate the upcoming market dynamics effectively.
