Avalanche (AVAX) is showing signs of a potential rally after months of aggressive corrections. AVAX is currently trading at $23.43 at the time of writing and has recently broken through a critical resistance level of $22.80, confirming a structural shift in the daily time frame.
This move marks a significant change in momentum for the token, which has been undergoing a continuous correction since its all-time high in March. After a prolonged period of decline, AVAX is now showing strength, attracting the attention of analysts and investors alike. Many are expecting a bullish rise in the coming months as the token starts to recover from its prolonged downturn.
AVAX correction may be over
Since March, Avalanche has undergone an aggressive correction, losing more than 70% from its all-time high. However, many analysts believe that this downward trend is finally over, setting the stage for a new rally.
Crypto analyst and trader Dom van X has emphasized AVAX Price Action within a clearly defined 6-month descending channel—a pattern often associated with a bullish reversal. According to Dom, such a reversal is only confirmed when the bearish structure breaks out on higher time frames.
Dom is keeping a close eye on the psychological level of $25 as a critical confirmation point. A sustained move above this level would signal a stronger bullish shift and could trigger significant upward momentum for AVAX.
As the L1 blockchain shows signs of recovery, analysts are increasingly optimistic about its prospects in the coming months. With token trading around a key indicator, the market is closely watching for confirmation of a bullish trend.
Before a rally can begin, however, price must test a key level of liquidity. The outcome of this test will be crucial in determining whether the recent upward momentum can be sustained or whether further consolidation is needed.
Price consolidation around key level
Avalanche is currently trading at $23.43 and testing the 4-hour (4H) 200 exponential moving average (EMA)an important technical indicator that has not been challenged since July 29th. This level is important because it often acts as a dynamic resistance in the market. If AVAX can consolidate above this 4H 200 EMA, bulls could aim for the next target at $25.88, a critical level that could further confirm the uptrend.
However, if the price fails to close above the 4H 200 EMA, it will likely revisit the previous high of $22.80 as the next logical level to test. The next few days will be crucial in determining AVAX’s price action as the market keeps a close eye on a sustained rally or a potential pullback. With the right momentum, there is significant potential for future gains.
Cover image of Dall-E, charts from TradingView.