The cryptocurrency market saw a significant pullback yesterday, with many assets falling to lower levels. Avalanche (AVAX) suffered a 15% decline from its recent local high of $28.01.
This pullback has caught the attention of analysts and investors, who are now looking at it as a strategic entry point for the asset. AVAX is currently testing a key support level, which if respected, could pave the way for further gains. Analysts suggest that this level is essential to maintain the uptrend and potentially lead to further gains for the Layer-1 blockchain.
If the support levels hold, it could signal a continuation of the uptrend, with the price potentially retesting its previous highs and moving further. However, the asset could see further declines or sideways movement if the support fails. The coming days will be crucial in determining whether AVAX is able to capitalize on this opportunity and resume its upward momentum.
AVAX Testing Requires Critical Demand
Avalanche stock is testing critical demand at $23, putting it in a key reaction area that could lead to a major price move in the coming weeks. Both traders and investors are closely watching this level, which represents a pivotal point for Avalanche’s next move.
Prominent analyst and investor Posti recently Share your analysis on Xhighlighting the importance of a retest of the $23 level. It suggests that this level provides an excellent entry point for those looking to capitalize on a potential upside.
Posti also points out that for those who prefer a more conservative approach, waiting to enter above $32 could also be a smart move, providing further confirmation of an uptrend.
If this test holds, the price could see a strong upward movement, with the potential for significant gains. Historically, Avalanche has shown the ability to recover strongly after such corrections, leading to rapid price increases.
This potential for an upside rally has attracted significant interest as investors seek to position themselves ahead of the next market move. The coming days will be crucial in determining whether the price can maintain its bullish structure and take advantage of this opportunity to push higher.
32 After testing support?
Avalanche stock is currently trading at $24.54 after successfully setting and holding its 4-hour moving average at 200, a major support level that the asset lost in July but has now regained and tested over the past week.
This moving average is a crucial indicator of price strength and has historically supported the AVAX indicator. A successful retest of this level suggests a potential continuation of the uptrend, but the price needs to hold above this support to maintain the upward momentum.
For the price to continue its upward trajectory, it must remain above its critical 4-hour moving average at 200 and challenge the local high at $28.01. A break above this level would confirm the continuation of the uptrend and could lead to further gains.
However, if AVAX stock fails to hold its support at the 200-4-hour moving average, the next logical demand area to test would be around $22.8. This level is likely to act as the next line of defense for bulls, making it a key area to watch in case of a price pullback.
Featured image by Dall-E, chart by TradingView
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