Recently, the cryptocurrency market experienced a significant pullback, impacting various assets including Avalanche (AVAX) which saw a 15% decrease from its recent high of $28.01. This decline has drawn attention from analysts and investors who see it as a strategic entry opportunity. AVAX is currently testing a crucial support level that could potentially lead to further gains for the Layer-1 blockchain.
Analysts emphasize the importance of this support level for sustaining the uptrend and speculate on the possibility of a bullish continuation if the support holds. However, failure to maintain this support could result in further declines or sideways movement. The next few days will be critical in determining AVAX’s price direction and momentum.
Testing Crucial Demand Levels
At $23, Avalanche is testing a critical demand level that could trigger a notable price movement in the upcoming weeks. Traders and investors are closely monitoring this level as it represents a decisive point for AVAX’s future trajectory.
Renowned analyst Posty has highlighted the significance of the $23 retest, suggesting it may offer a favorable entry point for those anticipating an upward movement. Posty also advises a more conservative approach of waiting for an entry above $32 to confirm a bullish trend.
If AVAX succeeds in holding this retest, there is potential for a substantial price increase, given its historical pattern of robust rebounds following corrections. Investors are eager to position themselves for a potential bullish breakout in anticipation of higher prices.
Price Outlook and Key Resistance Levels
Currently trading at $24.54, AVAX has successfully held its 4-hour 200 moving average, a crucial support level that signals price strength. Reclaiming and testing this moving average indicate a possible continuation of the bullish trend, contingent upon maintaining position above this support.
To sustain its upward momentum, AVAX must uphold the 4-hour 200 moving average and challenge the local high at $28.01. Surpassing this level would confirm a bullish trend continuation, potentially leading to further price gains.
In case AVAX fails to maintain support at the moving average, the next significant demand area to watch would be around $22.8, serving as a crucial defense line for bullish investors in case of a price pullback.
Image credits: Featured image from Dall-E, chart from TradingView
