The past month saw Avalanche [AVAX] record a notable 13.68% surge, with analysis of its chart patterns suggesting that this uptrend is likely to persist, further bolstering its gains.
Insights from CryptoCrypto delve into the factors fueling this projected rally.
Positive Outlook for AVAX
Currently, AVAX is trading in a bullish triangle formation on the daily chart, defined by an upper diagonal limit and a foundational support level.
Recently, AVAX surpassed this upper resistance and retraced back to the support level at $23.28, a move that garnered favorable market response.
If the buying momentum at this level endures, AVAX could target three significant price levels: $28, $33, and ultimately $40. Conversely, a wane in buying pressure may push its price down to $20.45 and potentially even $17.29.
The substantial rebound and ensuing upward trend hint at the likelihood of AVAX seeing higher valuations in future trading sessions.
Support from Retail Investors Drives the Rally
Both the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) point towards a strengthening sentiment among traders.
The MACD recently displayed a Golden Cross, often a precursor to a rally, with the MACD line now positioned positively at 0.23, indicating further price upticks.
Moreover, the RSI, a momentum gauge that measures the speed and scale of price changes on a scale from 0 to 100, has rebounded from a neutral position at 50.
This upward momentum in the RSI signals a bullish market direction, hinting at potential price escalations in the upcoming trading sessions.
Increasing Market Interest Signals
Coinglass reports a noticeable surge in capital inflows into the market, underscoring its resilience.
This surge is mirrored in the Open Interest (OI), which monitors the total count of unsettled derivative contracts, showing a 3.58% increase as of the latest updates.
Such rises typically pave the way for surges in asset prices. Should the OI continue its upward trajectory, AVAX is likely to gravitate towards the $40 threshold.