Avalanche (AVAX) Hits Key Support – Rebound or Drop?

Avalanche (AVAX) Testing Key Support Levels

Looking at the weekly chart for AVAX, the cryptocurrency has been trapped in a prolonged descending triangle pattern since its peak during the last bull run in 2021. The most recent rejection from the upper resistance at $55.79 on December 2 marked the beginning of another significant downtrend.

The tariff announcement has added further selling pressure to AVAX, pushing it into a crucial support zone between $17 and $23. Currently, the price hovers around the $20 mark, sitting in the middle of this critical range. This level has historically acted as a strong demand zone, leading to multiple rebounds in the past. However, this area is now under serious test as AVAX struggles to maintain its position.

Potential Scenarios for AVAX Price Movement

If AVAX can hold this support, a relief bounce could occur, targeting the 100-day moving average. A break above this level would open the door for a potential move towards the upper resistance of the descending triangle around $35.

However, if the support fails to hold, AVAX could experience a deeper correction, with the next major support zone being between $11 and $12. This would represent a significant further decline, which could raise concerns about the long-term viability of the current price levels.

What’s Next for AVAX? Key Factors to Watch

AVAX currently finds itself at a critical juncture, with its next major move heavily dependent on broader market conditions. The performance of Bitcoin (BTC) and Ethereum (ETH) will be especially important in influencing the price action of AVAX moving forward.

Technical indicators, such as the MACD, are still signaling bearish momentum, suggesting that the downward trend may not be over yet. However, a bullish crossover could signal a reversal in the coming weeks, providing hope for a potential recovery.

Traders and investors should closely monitor whether AVAX can maintain its current support level. A successful defense of this key support could lead to a strong recovery, while a breakdown below this level may signal further downside risk.

Key Levels to Watch for AVAX

• Support Zone: $17 – $23 (Critical support area)
• Resistance: $35 (Upper resistance of the descending triangle)
• Potential Downside Support: $11 – $12 (Next major support zone)

In conclusion, Avalanche (AVAX) is at a critical tipping point. While the possibility of a relief bounce exists, the broader market conditions and key technical indicators suggest that caution is warranted. Investors should keep a close eye on key price levels to determine the next major move for AVAX.