Avalanche's native token, AVAX, is positioned right at a crucial long-term weekly resistance level that could determine its next major move. Holding above $20.65 support after finally breaking this barrier could set the stage for an explosive rally upwards.
Keypoints
- AVAX price broke above crucial weekly resistance at $20.65 that had rejected rallies for over a year
- Holding $20.65 as support now could ignite 70% rally towards $35 target
- In strongly bullish scenario, AVAX could extend towards $40 for 100% gain
- Breaking back below $20.65 would invalidate bull case and risk 22% pullback
- Short and long-term moving averages presenting predominantly bullish signals for AVAX price
AVAX managed to close last week above $20.65 for the first time in over a year, after rallying 186% from late September. Repeated rejections off this hurdle on higher time frames sank previous uptrend attempts and led to massive selloffs.
Now that bulls have reclaimed this level, it must flip to become support for the current positive momentum to continue. That would confirm the uptrend as sustainable and backers being in control.
The first upside target in play if $20.65 holds is $35. That would constitute a 70% surge from the current price. In an extremely bullish scenario, AVAX could extend as high as the psychological $40 mark for a total 100% gain.
That lines up with the midpoint of Avalanche's massive 94% recovery from its 2022 bear market bottom. It would also take AVAX to retest the weekly resistance level around $36 where sellers could emerge to stall the rally.
Oscillators are mostly neutral currently, not yet reflecting the bullish price action seen last week. But moving averages are flipping to bullish across short, medium and long-term time frames. The consistency of the buy signals points to positive momentum building.
If the weekly close above $20.65 proves to be a false breakout, the bullish outlook would face invalidiation. AVAX falling back below that level would likely trigger a wave of selling fueling a 22% decline back towards the $16 support zone.
For now, AVAX appears poised to embark on a major bull run if $20.65 holds as support on a weekly basis. But it remains a very delicate point that requires follow through from buyers to prevent a bull trap. Sustaining the breakout would ignite AVAX price action for its most substantial gains since the cryptocrash drawdown.
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