The Avalanche (AVAX) price could confirm its bullish reversal with a breakout from the current short-term pattern.
AVAX is the native token of the Avalanche network, a blockchain platform specializing in smart contracts. The Avalanche price has fallen under a descending resistance line since reaching a yearly high of $22.79 on Feb. 2. The decrease led to a low of $13.88 on March 10.
However, the price bounced immediately afterward, reclaiming the 0.618 Fib retracement support level at $15.10. So, the low is considered a deviation (green circle).
Despite the reclaim, the trend is not considered bullish yet. This is because the price did not break out from the resistance line, and the RSI did not break out from its bearish divergence trend line (green line). These must occur before the trend can be considered bullish.
Therefore, whether the AVAX token price breaks out from the resistance line or breaks down from the $15.10 area instead will likely determine the future trend. A breakout could lead to highs near $19.45, while a breakdown could catalyze a fall to $12.
Has Avalanche (AVAX) Price Completed Correction?
The technical analysis from the six-hour time frame shows that the AVAX price has completed an A-B-C corrective structure. The deviation and reclaim of the 0.618 Fib retracement support level supports the structure. However, the failure to break out from the descending breakout indicates that the reversal is not confirmed yet.
However, the two-hour chart supports the possibility of a breakout, since it shows the price trading inside a descending parallel channel. Such channels usually contain corrective movements. As a result, a breakout from it would be expected.
Since the channel’s resistance line also coincides with the long-term descending resistance line, a breakout from it would likely catalyze an increase toward $19.45.
On the other hand, the channel’s support line coincides with the 0.618 Fib retracement support level at $15.10. Therefore, a breakdown from it would invalidate the bullish structure and could catalyze a fall to $12.
To conclude, the most likely AVAX price forecast is a breakout from the current short-term channel, leading to an increase toward at least $19.45. However, if the digital asset price breaks down, it will invalidate the bullish structure and could cause a drop to $12.
Bitrue