Avalanche: Will network developments pay off for AVAX
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Disclaimer: The following analysis is the sole opinion of the writer and should not be considered investment advice.
- Avalanche has seen a reversal pattern, can it sustain a breakout rally?
- Cryptocurrency development activity and funding rates reveal an advantage for buyers.
Avalanche price prediction for 2023-2024
While trendline resistance (white, dashed) has thwarted an attempt to buy for the past seven months, the recent reversal has placed Avalanche [AVAX] below the south-facing EMA bands.
Finding new lows, the alt sought to test its long-term support in the $14.8 region. The bulls may now point to a diving point for a convincing pattern breakout in the coming sessions.
At press time, AVAX is trading at $15.3, down nearly 1.51% over the past 24 hours.
AVAX has appeared a reversal pattern near its long-term support
While resistance at the seven-month trendline offsets recent buying pressure, AVAX marks an expected drop, causing a loss of more than 49% over the past two months.
Meanwhile, the EMA bands turn bearish and head south to uncover the fundamental selling edge. After a relatively high volatility move over the past two days, AVAX has entered a compression phase over the past few weeks. Meanwhile, it noted a falling wedge structure on its daily chart.
A close above the trendline and 20 EMA resistance will confirm a potential breakout. In these cases, buyers can test the resistance in the $18.3-$18.5 range.
On the other hand, any drop below immediate support could help sellers accelerate their advantage. In this case, the first major support would be in the $12.6 region.
The Relative Strength Index (RSI) has reversed from the oversold zone to corroborate the bullish report again. A continuation rally from where it was at press time could help the bulls create a short-term rally in the coming sessions.
Avalance's growth has a positive impact on AVAX
As of May 2022, AVAX exhibits a relatively high sensitivity to its development activity. Over the past five months, activity continued to grow, but the price action failed to withstand the broader market sell-offs. If the overall sentiment improves, the price will continue to move north to follow the metric, as before.
First, the funding rate on Binance has marked a steady trend over the past month. As a result, they turn positive and highlight favorable fundamental sentiment for buyers. But the price action still doesn't reflect this sentiment.
Ultimately, traders need to take into account the movement of Bitcoin and its influence on the broader market in order to make a profitable move.
Oct 21, 2022