Despite the overall bearish trend in the global cryptocurrency market, Avalanche [AVAX] has managed to shine, establishing itself as one of the top 20 cryptocurrencies by market capitalization showing positive performance.
Amid the market downturn, AVAX has demonstrated a remarkable uptick, with its value rising by 8.2% in the past seven days.
This positive trend has continued over the last 24 hours, with the cryptocurrency recording an additional 1.2% gain, currently trading around $29.46 at the time of this report.
What Lies Ahead for AVAX?
As AVAX continues its ascent, well-known crypto analyst CryptoBullet shared his insights on Avalanche’s recent price movements via X (formerly known as Twitter).
According to the analyst, AVAX has broken out of a prolonged “Falling Wedge” pattern, which is considered a bullish signal in technical market analysis.
Falling wedges typically occur after a long period of decline, where the price consolidates, forming lower highs and lower lows, resembling a wedge shape.
Breaking above the upper trendline of this wedge often marks the end of a bearish trend and the start of a new upward movement.
Commenting on this breakout, CryptoBullet mentioned,
“AVAX has broken out of a long Falling Wedge pattern. I anticipate a strong rally in the next 3–6 months.”
He also outlined ambitious price targets for the anticipated rally, forecasting that Avalanche could reach $130 or even as high as $228, depending on market conditions.
These target prices, though bold, signify the increasing optimism surrounding Avalanche as the cryptocurrency market seeks signs of recovery.
Evaluating Avalanche’s Technical Indicators
While technical analysis points towards a potential upsurge for AVAX, a more thorough examination of the cryptocurrency’s fundamentals is required to assess the likelihood of a significant price surge.
One critical metric to consider is the Relative Strength Index (RSI), which measures the momentum of a digital asset’s price movements.
The RSI scale ranges from 0 to 100, with values above 70 indicating overbought conditions and below 30 signaling oversold conditions.
Presently, Avalanche’s RSI stands at 58, as per CryptoQuant data.
This indicates that the cryptocurrency is in a neutral state—neither overbought nor oversold—allowing for potential movements in either direction based on broader market dynamics.
In addition to RSI, another significant metric to analyze is the Open Interest, which tracks the total number of open futures contracts for a particular asset.
Coinglass data indicated a 2.33% decrease in AVAX’s Open Interest, valued at $299.64 million at the current time.
Nevertheless, this drop was counterbalanced by a substantial 27% surge in AVAX’s Open Interest volume, reaching $541.01 million.
This uptick indicates a growing involvement in AVAX derivatives markets, a factor that could potentially influence the cryptocurrency’s price action in the short term.