Avalanche (AVAX) valuation manifested a propitious formation at an enduring support level, potentially heralding the inception of an upward trajectory. While daily timeframe price action exhibits a marked repudiation, does the abbreviated trend imply an imminent upswing for AVAX token valuation?
AVAX valuation has diminished following the rebuff of the $21.50 horizontal resistance zone on April 18. This marked the fourth unsuccessful endeavor to surmount the zone (red icons).
Despite each contact progressively enfeebling the areas, the digital asset failed to penetrate the zone on its fourth attempt, resulting in a precipitous descent that guided AVAX valuation to a protracted ascending support line.
This line, extant since the year’s commencement, delineates the incline of the upward movement. Consequently, a price breach to either direction could wield significant influence in determining the subsequent trend. The nearest support zone resides at an approximate valuation of $14.20.
Short-term, six-hour timeframe technical analysis delivers a more sanguine price forecast for AVAX. AVAX has established a double bottom, regarded as a bullish configuration, frequently presaging future price ascents.
Furthermore, the double bottom coincided with a bullish divergence in the Relative Strength Index (RSI) (green line), which may be construed as a favorable development wherein the waning momentum does not corroborate the price depreciation. This could enhance the double bottom’s credibility. Consequently, should the double bottom materialize, AVAX valuation might escalate to the 0.618 Fib retracement resistance level at $19.55.
Fibonacci retracement levels operate on the premise that following a substantial price shift in one direction, the valuation may partially revert to a preceding level before resuming its initial course. However, if AVAX valuation breaches the second bottom and the ascending support line, a steep decline to the $14.20 region could transpire.