Avalanche (AVAX) is showing a noticeable short-term recovery after a sharp drop from the $6.9–$7.0 area to a low near $5.8. According to Alpha Crypto Signal, the Avalanche price is forming a V-shaped rebound on the 4-hour chart and is now testing a neckline resistance zone around $6.2–$6.3.
This level previously acted as support before the breakdown, making it a key area for determining whether the recovery continues or fades.
However, the Avalanche price action indicates that there were strong buyer entries at the support level with a huge increase in volumes. It is usually a sign that sellers have capitulated and institutions have begun buying.
Source: X
Following this low, the AVAX has formed higher lows, signaling stabilization. However, the Avalanche price is currently below all major moving averages and is ranging from $6.34 to $6.99.
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Avalanche Price Chart Still Leaning Bearish Despite Bounce
AVAX is still far from making up for the lost momentum and has not managed to recover its short-term trend despite the bounce.
The moving averages continue to move downwards, indicating negative momentum. According to Woetoe, the Avalanche price is trading at $6, which is 90% off its November all-time high of $65.
In the weekly chart of AVAX, it can be seen that the coin is in a long-term downward trend since its huge rally up to $150 in the year 2021. Thereafter, the coin witnessed selling and a consistent decline at important levels of support throughout 2022.
This has formed an obvious bearish trend characterized by lower highs and lower lows. As such, in the year 2024, the Avalanche price attempted to rally above $60 but found rejection at higher resistance levels.
Source: X
Critical $5 Zone Holds the Key to Next Cycle Move
The most important price point on the chart is the cycle low for 2022 at approximately $4.80-$5.00. AVAX is trading right above this level and, therefore, represents an essential level of support for the coin. This price point has been the final chance for long-term accumulation before.
The $18-$20 range is an important major barrier and significantly higher than the current price level. The return above that range will be essential for indicating a bullish formation. In the meantime, the Avalanche price will remain under pressure due to the resistance above.
On a short-term basis, maintaining the level of $6.2 will allow the price to move up towards $6.8-$7.0, whereas a decline below $5 may cause further losses due to a weak support below. It is an important moment of choice for the market.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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