Avalanche (AVAX) has the potential to surge by 21%, reaching the $25.15 level, provided it closes a daily candle above the $21 threshold. This bullish outlook is contingent on maintaining that closing; otherwise, the anticipated rally could falter. Following a significant price drop of over 70%, AVAX is positioned for a potential recovery.
The current market dynamics and an increase in interest among traders are contributing to a sense of optimism about the asset’s future performance. On-chain analytics from IntoTheBlock indicates a remarkable 169% increase in large transaction volume, reflecting heightened engagement from both investors and whale participants. At the time of reporting, AVAX traded at approximately $20.05, having experienced a 2.50% decrease in the last 24 hours.
Nevertheless, trading volume increased by 22%, reinforcing the assertion of growing trader participation and underscoring an optimistic outlook. Technical analysis by AMBCrypto suggests a bullish sentiment for AVAX, as multiple indicators point in a positive direction. On a weekly basis, AVAX seems to be moving within a descending channel but has recently formed a strong bullish engulfing candlestick pattern after retesting the lower boundary.
Conversely, in the daily timeframe, the asset has exited a descending channel and approached a bullish cup and handle formation. This breakout signals significant upside potential, particularly if AVAX can close above the key $21 level. Despite trading below the 200 Exponential Moving Average (EMA), indicating a prevailing downtrend, the asset’s Relative Strength Index (RSI) is positioned near 56.
This suggests that there remains ample room for upside movement. The bullish thesis for AVAX hinges on sustaining a close above the $21 mark; failure to do so could result in the rally’s collapse.