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Avalanche (AVAX) recently retested the critical support level at $26.34 and is now showing signs of rising. Recent data reveals that AVAX has climbed to $28.22, indicating a positive trend. This optimism is supported by increased development activities on the Avalanche network. So, what does this rise mean?
Avalanche Faces Resistance at $32.66
Earlier this week, the cryptocurrency Avalanche faced resistance at $32.66, causing the price to drop to the support level of $26.34. However, this bounce from the support level resulted in a 2% increase, bringing AVAX to $27.95. If this support level holds, AVAX has the potential for a rally to retest the $32.66 level, which could result in a 24% increase.
Technical indicators provide promising signs for the continuation of this bullish scenario. The Relative Strength Index (RSI) briefly dipped below 50, and the Awesome Oscillator (AO) followed a similar pattern. For the upward momentum to continue, these indicators need to stay above their average levels.
Additionally, data from IntoTheBlock shows that approximately 147,960 addresses hold 1.24 million AVAX at an average price of $27.43. This data highlights the importance of the support zone between $26.99 and $27.78, which should be closely monitored.
There are also positive signals in terms of development activities. Santiment’s Development Activity index increased from 179 on July 22 to 188 on July 25. This rise is considered a positive indicator for the health of the Avalanche network and supports the bullish outlook for AVAX.
Risks and Levels to Watch
Every rise carries a risk. If the price of the cryptocurrency AVAX falls below $21.99 at the daily candlestick close, the bullish thesis will be invalidated. This could indicate lower levels on the daily chart and pose an 11% downside risk, potentially heading towards the low of $19.47 on November 28, 2023.
At this point, the cryptocurrency Avalanche (AVAX) is showing a promising rally after bouncing from a critical support level. Increasing on-chain development activities and technical indicators support this rise. A close below the $21.99 level could invalidate this bullish scenario.
