AVAX price recovery to $20 is dependent on these factors
|- AVAX price approaches a bullish breaker, extending from $12.44 to $14.43, increasing its chances of a trend reversal.
- The chances of a recovery rally, while high, are still at the mercy of Bitcoin movements.
- A decisive flip of the $12.44 support into a resistance level will invalidate the recovery thesis.
AVAX price has been in a consolidation phase for nearly a year with no end in sight. As the altcoin approaches the lower limit of this range, there are two ways Avalanche might resolve the tightening - a recovery bounce or a breakdown that leads to a steep correction.
AVAX price at critical level
AVAX price formed the $13.71 to $30.82 range between June 2022 and August 2022. Since then, the Avalanche has been hovering below the range’s midpoint at $22.26 with multiple failed attempts to overcome it.
The last two failed attempts in January 2023 and April 2023 set AVAX price on a downtrend. So far, the altcoin has shed 31% from its local top at $21.58. Interestingly, there is a strong confluence made of the range low at $13.71 and the Bullish Breaker, extending from $12.44 to $14.43, present to absorb the incoming selling pressure.
A Bullish Breaker is characterized by the formation of an upward candlestick between two lower lows.
The last time AVAX price tagged this breaker, it triggered a 46% ascent. Although the buying pressure might have reduced, the chances of another bounce are high. The targets for this recovery rally include $21.36, followed by the range’s midpoint at $22.26.
This move would constitute a 51% ascent, but here are a few constraints that need to hold for this rally to occur:
- The range low and the Bullish Breaker confluence, extending from $12.44 to 14.43, needs to be defended.
- Bitcoin price should not trigger a sudden spike in selling pressure.
While a 51% move is highly unlikely considering the current market conditions, investors can focus on a lower timeframe target at $16.46. If AVAX price manages to hold above this level and creates a string of higher highs in doing so, the chances of an extension of the recovery rally would be heightened.
AVAX/USDT 1-day chart
On the other hand, if the selling pressure takes over, pushing AVAX price to produce a three-day candlestick close below the Bullish Breaker’s lower limit at $12.44, it would break investor confidence. If this move flips the $12.44 level into a hurdle, it would invalidate the recovery thesis and attract more sellers, potentially triggering a sweep of December 30, 2022, swing low at $10.53.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.