Avalanche surged more than 7% over the past seven days
Despite the price rally, market sentiment around #AVAX remained bearish.
Unlike most cryptocurrencies, Avalanche (AVAX) bulls held their ground as the token managed to sustain its upward price trend.
Indeed, its price reached a critical level that could trigger a bullish breakout, potentially allowing it to surpass Shiba Inu (SHIB) to become the eleventh-largest cryptocurrency.
Avalanche on the Verge of a Breakout
According to CoinMarketCap, the price of AVAX had risen more than 7% over the past seven days. In just the last 24 hours, the token's value increased by over 4%.
At the time of writing this article, Avalanche was trading at $37.09 with a market capitalization of over $14 billion, making it the twelfth-largest cryptocurrency.
Meanwhile, World Of Charts, a popular crypto analyst, recently tweeted highlighting a descending wedge pattern that emerged on AVAX's 4-hour chart.
The good news was that AVAX's price was on the verge of breaking out of that pattern. If the token manages to do so, investors can expect a massive bullish rally.
The upcoming rally could also potentially allow AVAX to surpass SHIB, as the difference in their market capitalizations was only $400 million. Analysis by AMBCrypto of Glassnode data revealed more concerns for #SHÄ°B
SHIB's NVT ratio recorded an increase, indicating a price drop. A decline in SHIB's price could aid AVAX in overtaking the meme coin if it breaks above the descending wedge.
Is an AVAX Bullish Rally Inevitable?
To gauge the possibilities of AVAX remaining bullish, AMBCrypto analyzed its metrics. We found that its open interest increased alongside its price.
This suggested that the bullish rally could continue and allow AVAX to break out of the descending wedge. However, sentiment around AVAX remained bearish as its weighted sentiment remained low.
The Chaikin Money Flow (CMF) supported the possibility of a breakout as it recorded an uptick and headed further above the neutral mark.
Additionally, the MACD also showed a bullish crossover, further suggesting a continued price uptrend.
However, the Relative Strength Index (RSI) and Money Flow Index (MFI) remained bearish as they moved sideways in recent days.
Considering the best-case scenario where AVAX breaks out, the first possible target it should aim for is $40.
A successful breakout above that level could allow the token to surpass $50 in the coming days, potentially resulting in $AVAX overtaking $SHIB
SHIB's NVT ratio recorded an increase, indicating a price drop. A decline in SHIB's price could aid AVAX in overtaking the meme coin if it breaks above the descending wedge.
Sources: Glassnode, TradingView
