The price of Avalanche (AVAX) could confirm its bullish reversal with a breakout from the existing short-term pattern.
AVAX is the native token of the Avalanche Network, a blockchain platform specializing in smart contracts. Since hitting a yearly high of $22.79 on February 2, Avalanche price has declined below a descending resistance line. This decline resulted in a low of $13.88 on March 10.
However, the price bounced back soon after, retaking the 0.618 Fibonacci retracement support level at $15.10. So, the low is considered a divergence (green circle).
Despite the reassertion, the trend is not yet considered bullish. This is because the price did not break out of the resistance line, and the RSI did not break out of its bearish divergence trend line (green line). This must happen before the trend is considered bullish.
Therefore, whether the AVAX coin price breaks out of the resistance line or breaks above the $15.10 area will instead determine the future trend. A breakout could lead to a high near $19.45, while a breakdown could catalyze a decline towards $12.
Is The Avalanche (AVAX) Price Correction Complete?
Technical analysis on the six-hour time frame shows that AVAX price has completed an ABC corrective formation. The divergence and a retracement of the 0.618 Fibonacci retracement support level favor the structure. However, the failure to break out of the descending breakout indicates that the reversal is yet to be confirmed.
However, the two-hour chart supports the possibility of a breakout, as it shows the price trading inside a descending parallel channel. Such channels usually have corrective activities. As a result, a breakout would be expected from this.
Since the resistance line of the channel also coincides with the long-term descending resistance line, a breakout of it would catalyze an increase to $19.45.
On the other hand, the support line of the channel coincides with the 0.618 Fibonacci retracement support level at $15.10. Therefore, a break below this would invalidate the bullish structure and could catalyze a decline to $12.
To conclude, the most likely AVAX price prediction is a breakout from the current short-term channel with an upside move to at least $19.45. However, if the digital asset price breaks down, it will invalidate the bullish structure and could lead to a drop towards $12.
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