Avalanche has been trading below a descending trend line since late March, with a series of lower highs and lower lows marking a clear downtrend. However, recent price action suggests that AVAX/USD may be preparing for a potential trend reversal as it tests significant Fibonacci retracement levels.
The cryptocurrency recently bounced off the 0.00% Fibonacci level around $14.67, which appears to have served as a strong support area. This bounce has led to a recovery that is now challenging the 38.2% Fibonacci retracement level at $16.62, with price currently trading near the $17.40 mark.
Key Avalanche Levels to Watch
The Fibonacci retracement tool drawn from the recent high to low shows several critical levels that traders should monitor:
- 0.00% level at $14.67 (recent bottom)
- 38.2% level at $16.62 (recently broken resistance)
- 50.0% level at $17.32 (current resistance zone)
- 61.8% level at $17.94 (major resistance ahead)
- 100.0% level at $19.97 (previous significant high)
Price has managed to break above the 38.2% Fibonacci level and is now testing the 50.0% retracement level at $17.32. A decisive break above this level could open the path toward the 61.8% Fibonacci level at $17.94, which coincides with the upper boundary of the descending trend line.
AVAXUSD Technical Analysis
The chart shows that Avalanche has recently crossed above the 100-period moving average (blue line), which is a bullish signal.
However, the 200-period moving average (red line) still looms above as resistance, suggesting that the longer-term trend remains bearish for now. The narrowing gap between these two moving averages indicates diminishing bearish momentum, though a bullish crossover has not yet formed.
The Stochastic oscillator (14, 3, 3) is approaching the overbought region around the 100 level, suggesting that buying pressure has been strong in the short term. However, traders should be cautious as this could also indicate that a temporary pullback might occur before the uptrend can continue.
The MACD (12, 26, close) has recently crossed above its signal line and entered positive territory, forming green histogram bars. This bullish crossover reinforces the potential for continued upward momentum in the near term.
Avalanche Price Outlook
AVAX/USD appears to be forming a potential reversal pattern, having broken out of a small consolidation zone between $16.00 and $17.00. The recent bullish candles with strong closes above previous resistance levels suggest that buyers are regaining control.
If current resistance at the 50.0% Fibonacci retracement level ($17.32) is overcome, we could see AVAX extend its recovery toward the 61.8% level at $17.94. A break above this level would likely confirm a reversal of the short-term downtrend and potentially signal a challenge of the $20.00 psychological level.
From a broader perspective, AVAX needs to break convincingly above the descending channel’s upper boundary and the 100.0% Fibonacci level at $19.97 to confirm a longer-term trend reversal. Until then, the recovery might be viewed as a pullback within the larger downtrend.
Traders should watch for reversal candlestick patterns around the 50.0% or 61.8% Fibonacci levels, which could indicate the resumption of bearish momentum. Conversely, strong green candles closing above these levels would reinforce the bullish case, especially since Standard Chartered projected a strong surge in Avalanche prices into 2029.
Market participants should also remain attentive to broader cryptocurrency market dynamics and regulatory developments, as these fundamental factors could significantly impact AVAX’s price trajectory regardless of technical setups.
