As the Market Rebounds, Avalanche Looks Set to Break Out
Avalanche's AVAX token is heading to test a critical area of resistance that could result in a breakout.
- Avalanche's AVAX has risen by more than 10% over the last few hours.
- It is yet to slice through critical resistance to signal a trend reversal.
- Breaking through $86 could push AVAX to $128.
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Avalanche’s AVAX token appears to be gaining bullish momentum. Still, it is yet to overcome a significant supply barrier that would allow its price to advance.
Avalanche Faces Resistance
After enduring a 22% correction over the last week, Avalanche is showing signs of life.
The cryptocurrency market kicked off Wednesday trading in the green. Bitcoin gained more than 4,000 points in market value while Layer 1 tokens like Solana and Avalanche surged by more than 10%. Most digital assets are still trading below crucial resistance levels despite the significant gains incurred.
AVAX is currently stuck within a symmetrical triangle that has been forming since the beginning of the year. A descending trendline developed along with the swing highs, while an ascending trendline formed along with the swing lows. This continuation pattern estimates that a spike in demand for AVAX that pushes it above the $86 resistance level could propel its price to $128.
The optimistic target is determined by measuring the distance between the two highest points of a triangle and adding it to the breakout point.
While the odds currently appear to favor the bulls, uncertainty surrounding the ongoing Russia-Ukraine conflict—and a possible global recession on the horizon—could severely impact the cryptocurrency market.
The $72 support level is a key point of note for AVAX. Any signs of weakness around this vital demand zone could encourage investors to exit their long positions to avoid incurring significant losses. The spike in downward pressure could then push AVAX toward $67, potentially invalidating the optimistic outlook.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
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