Avalanche (AVAX), standing among the top ten cryptocurrencies, is now wavering near a crucial resistance zone, suggesting a phase of market fatigue. The price, oscillating between $50 and $60, appears attractive for long-term investors aiming to build their holdings. Despite this, the diminishing strength of the recent uptrend, combined with the prospect of a drop towards the $39 support mark, could negate the current optimistic market outlook.
Indicators Point to a Potential Downturn for AVAX
After exceeding $40, Avalanche’s value rose to even higher peaks from late December to mid-March. Nonetheless, technical indicators like the Relative Strength Index (RSI) and Awesome Oscillator (AO) depict a contrasting trend with lower peaks, signaling a bearish divergence. This might forecast a retracement, as already evidenced by a 19% depreciation from its latest high of $65.
Entry Points and Resistance Levels for Buyers
The first collection zone, currently 5% to 10% below the present level, may offer initial entry points for accumulation. Should the price drop to this area and historical patterns hold, a surge in buy orders might propel AVAX beyond its resistance and towards a significant $80 threshold, defined by the midpoint of its last bear market.
Conversely, a slide past the $45 to $50 range would signal a broader downturn. This would position AVAX towards a possible decline to its $40 weekly support. If selling pressure ramps up, this floor could transform into a barrier, potentially leading to a steep 28% fall to the next key support at $28. However, such a bearish scenario is currently deemed unlikely.
