Avalanche (AVAX) is making waves in the cryptocurrency market as its price approaches an important resistance level of $50. Bulls are showing impressive strength, generating optimism for a potential breakout. A successful breakout above $50 could signal the start of a strong rally, grabbing traders’ attention and setting the stage for further gains.
This article aims to examine AVAX's upward momentum as it approaches the $50 resistance level and assess the likelihood of a breakout. The article also delves into the technical and market factors influencing price action and provides insight into whether bulls can push AVAX higher or if the resistance level will trigger a pullback.
Bullish Momentum Grows: Can AVAX Breakout?
On the 4-hour chart, AVAX is above the 100-day simple moving average (SMA), a key indicator of its current bullish trajectory. Notably, this consistency highlights the underlying strength of the coin and suggests that positive sentiment is driving its momentum. The steady rise reflects the growing optimism among traders, and Avalanche is now targeting the key $50 resistance level.
Checking the 4-hour relative strength index (RSI), it is found that the RSI has risen back above the 70% threshold after falling to 52%, indicating a revival of buying pressure and reflecting a renewed bullish trend in the market. The continued climb indicates strong overbought conditions, indicating strong demand and the possibility of further price increases.
Furthermore, the daily chart highlights strong upside momentum for AVAX, marked by the formation of a bullish candle as the price surges towards $50. Its position above the SMA reinforces the positive trend, showing continued strength. This upside momentum boosts market confidence and sets the stage for continued gains.
Finally, the RSI on the daily chart recently reached 75%, indicating that AVAX has entered overbought territory. This indicates that market optimism is strong and huge buying pressure is pushing prices higher. While this level suggests that there is potential for further gains, it also suggests that the asset may be overheated.
Is it about to break out or pull back?
As Avalanche approaches the critical $50 resistance level, two possible outcomes are unfolding: a breakout or a pullback. If the bullish momentum continues, AVAX could break above the $50 mark, sparking an uptick. This would signal a continuation of the uptrend with the next target being the $65 resistance level.
However, if the $50 resistance holds, a pullback is likely and the price could test the $42 support. A break below this level could result in a further decline that could push AVAX towards more support areas.
