Avalanche (AVAX) is showing signs of exhaustion near a crucial resistance area, indicating a potential correction in its price trajectory. Due to discrepancies in prices, investors are advised to monitor specific levels for potential accumulation opportunities.

Ranked 10th in the cryptocurrency world, Avalanche (AVAX) is displaying signs of exhaustion approaching the $51 to $56 resistance zone. Despite trading between $50 and $60, there are indications of a potential correction based on the downward trend seen on the weekly chart. Long-term investors may find the current price range suitable for accumulating AVAX. However, caution is advised due to weakening upward momentum and the risk of the price dropping back to the $39 support level. It is recommended for investors to closely monitor key levels for AVAX.

Bearish Divergence Indicates Potential Correction for Avalanche (AVAX)

After surpassing the $40 mark in late December, Avalanche (AVAX) has shown a significant milestone. However, from late December to mid-March, while AVAX's price reached higher highs, indicators like Relative Strength Index (RSI) and Awesome Oscillator (AO) have shown lower peaks. This discrepancy, known as a bearish divergence, often signals upcoming corrective movements in the asset's price.

As a result, AVAX has retraced from its recent peak of $65, experiencing a 19% decline with potential for further downside. Currently, the price is fluctuating between $45 and $50, with the first accumulation zone approximately 5% to 10% below the current level of $53. Investors should remain alert as AVAX navigates through this corrective phase.

Potential Price Scenarios for Avalanche (AVAX)

If historical patterns repeat, a decline towards the accumulation zone could trigger significant buying pressure, potentially allowing AVAX to break above the $51 to $56 resistance zone and retest the key barrier at $80. This level marks the midpoint of AVAX's past bear market.

On the other hand, continued decline beyond the $45 to $50 range could indicate overall market weakness, leading AVAX to retreat towards the weekly support level of $40.

Of concern is the potential increase in selling pressure, which could turn the $40 level into a resistance level for AVAX. This could result in a 28% decline for AVAX and testing the next major support level at $28, though this scenario is currently considered improbable.

Important: This article is for informational purposes only and should not be construed as legal, tax, investment, financial, or any other type of advice.