As of the latest market activity, Avalanche ($AVAX ) is trading at $37.21 (+1.16%), with the price action positioned near critical support and resistance zones. This analysis delves into AVAX's daily chart, highlighting key levels and potential scenarios for bullish or bearish movements.
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Resistance Levels
Critical Zone: $60 - $65.5
The zone between $60 and $65.5 represents a significant resistance level for AVAX.
Recent price rallies have been rejected near the $60 mark, indicating strong selling pressure in this area.
For a confirmed bullish continuation or a move towards new all-time highs, AVAX must break above $65.5 and establish stability above this level.
A conservative bullish entry point would be after the price holds firmly above $65.5, as the level has previously faced multiple rejections. If breached, this could signal a high probability of retesting the previous high or advancing to higher levels.
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Support Levels
Critical Zone: $27
On the downside, $27 serves as a pivotal support level, having historically provided strong support during sharp market declines.
A failure to hold above $27 would indicate a breakdown of the ascending trendline, leading to heightened selling pressure.
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Downside Target
Should the $27 level break, AVAX could face a potential 28% decline, entering a bearish phase due to a lack of strong support below this level.
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Historical Patterns
The current price action mirrors the patterns observed in early 2024:
AVAX is currently trading below the Ichimoku Cloud and encountering resistance at the daily 20 EMA and 60 EMA.
A death cross in the present setup could trigger a sharp decline similar to the early 2024 pattern.
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Outlook
Bullish Scenario:
A decisive breakout above $65.5, followed by stabilization, could pave the way for a significant rally, potentially reaching the previous high or surpassing it.
Bearish Scenario:
A breakdown below $27 may trigger substantial selling pressure, leading to a possible 28% decline and signaling a bearish market phase.
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Conclusion
AVAX is currently at a critical inflection point, with key levels at $65.5 on the upside and $27 on the downside. Traders are advised to adopt a cautious approach, closely monitoring price movements around these levels to capitalize on potential opportunities while mitigating risks.
