Overview of Key Developments
Avalanche (AVAX) is nearing a crucial demand zone, suggesting potential support and a possible end to the recent downtrend. Market momentum is hinting at a reversal, with traders closely monitoring key price levels for a potential breakout.
After months of declining prices, recent chart patterns and technical indicators point toward early stages of market stabilization. Trading activity indicates growing momentum, and while market sentiment remains cautious, analysts believe AVAX could be approaching a significant turning point.
AVAX Nears Demand Zone Following Downtrend
Since late 2024, AVAX has experienced a pronounced bearish trend, creating a series of lower highs and lower lows. The cryptocurrency is now approaching a critical demand zone between $14 and $17, which historically acted as a strong support level.
This zone is attracting renewed interest from buyers. Market analyst LLuciano_BTC notes that AVAX is gradually reaching its lowest levels within this range, suggesting that price stabilization occurs as momentum shifts from selling pressure to buying pressure.
Falling Wedge Pattern and Bullish Setup
AVAX has displayed a descending wedge pattern on the daily chart, which typically indicates a potential bullish reversal. The downward movement consistently established lower highs and lower lows, but the pattern is now narrowing as the price approaches the wedge's apex.
A breakout above the upper resistance line could signal the beginning of a new upward movement, potentially initiating a fresh bullish trend.
In the last trading session, AVAX gained 4.43%, closing at $16.75. The price fluctuated between $14.66 and $17.23, bringing the token closer to the descending wedge's resistance level. If Avalanche breaks above this level, it could target a short-term goal in the $25–$30 range. Further upward movement might potentially reach the $50 mark over time.
Momentum indicators show signs of a potential reversal. The Relative Strength Index (RSI) sits at 38.19, below the neutral 50 line but is slowly rising. The Moving Average Convergence Divergence (MACD) remains in negative territory; however, the gap is narrowing, indicating that bearish momentum is weakening.
Meanwhile, the Cumulative Volume Delta (CVD) shows a positive value of 534.8K, signaling increased buying pressure.
Analysts Spot Bullish Potential Despite Bearish Sentiment
Although overall market sentiment remains bearish, analysts are recognizing potential in AVAX's long-term performance. Some maintain a bullish perspective based on broader technical patterns.
According to observations by XBitcode, Avalanche's three-month chart appears to be "the most bullish in a decade." Earlier in the week, the token was still trending downward, but it is now consolidating within a symmetrical triangle on higher timeframes, strongly supported by the $14–$17 range.
The RSI and Stochastic RSI have indicated a reversal from oversold conditions. Additionally, AVAX is holding above the 0.618 Fibonacci retracement level, which could serve as support if the price stabilizes further.
In the last 24 hours, AVAX's futures open interest increased by 1.41%, reaching $177.8 million. This rise is driven by perpetual contracts, with the largest shares held by dYdX, Bybit, OKX, and Uniswap. The growing open interest indicates returning trader participation, which can support momentum and help break key price levels. To explore more strategies for identifying such market turns, traders often monitor these derivatives metrics.
AVAX Price Predictions and Market Performance
Current forecasts suggest Avalanche could decrease by 3.45%, potentially dropping to $19.55 by April 27, 2025. The Fear and Greed Index stands at 26, indicating fear, and technical indicators still reflect a bearish sentiment.
However, AVAX has recorded 16 green days out of the last 30, representing a 53% positive performance rate with a price volatility of 8.20%.
Analyst LLuciano_BTC speculates that the current price zone may be an accumulation area. If the demand zone holds and the token breaks the descending trendline, AVAX's price could rise toward $45–$50. This pattern mirrors previous breakout behaviors following prolonged bearish trends.
Traders are closely watching price action for confirmation of a reversal. A breakout above the descending wedge, coupled with sustained momentum above $17, could initiate a new trend. Until then, the $14–$17 demand zone remains the key area to monitor.
Frequently Asked Questions
What is the current AVAX price range?
AVAX is currently trading between $14 and $17, a critical demand zone that has historically provided strong support. This area is being closely watched for potential price stabilization or reversal.
What technical indicators suggest a potential reversal for AVAX?
Key indicators include a rising RSI (though still below 50), a narrowing MACD gap suggesting weakening bearish momentum, and a positive Cumulative Volume Delta indicating increased buying pressure. The descending wedge pattern on the daily chart also typically precedes bullish reversals.
How does futures open interest affect AVAX's price?
An increase in futures open interest, as recently observed, indicates growing trader participation and can support price momentum. This metric often precedes significant price movements, especially when accompanied by changing sentiment.
What are the potential price targets if AVAX breaks out?
If AVAX breaks above the descending wedge resistance, short-term targets could reach $25–$30. A sustained bullish move might eventually target the $50 area, especially if broader market conditions improve.
What is the significance of the Fibonacci retracement level?
AVAX is currently holding above the 0.618 Fibonacci retracement level, which often acts as strong support in financial markets. Maintaining this level could prevent further declines and provide a foundation for upward movement.
How reliable are descending wedge patterns for predicting reversals?
Descending wedges are generally considered reliable reversal patterns, especially when they occur after extended downtrends. The pattern indicates that selling pressure is diminishing, often leading to a breakout to the upside.