Ranked as one of the top cryptocurrencies, Avalanche (AVAX) is currently hovering in close proximity to a significant resistance area, indicating signs of market fatigue. With price levels fluctuating between $50 and $60, the current range may be enticing for investors looking to increase their long-term holdings. Despite this, the weakening momentum of the recent upward trend, coupled with the possibility of a decline towards the $39 support level, may challenge the current positive market sentiment.
Signals Pointing Towards a Potential Downturn for AVAX
Following a climb above $40, the value of Avalanche experienced further growth from December to March. However, technical indicators such as the Relative Strength Index (RSI) and Awesome Oscillator (AO) show a different trajectory with lower peaks, indicating a bearish divergence. This divergence could suggest a potential retracement, as reflected by a 19% decrease from its recent peak of $65.
Buying Opportunities and Resistance Marks for Investors
The initial accumulation zone, which lies 5% to 10% below the current price, might serve as a starting point for investors looking to acquire AVAX. If the price reaches this level and historical trends are maintained, a surge in buying activity could help propel AVAX past its resistance and towards a significant milestone of $80, which corresponds to the midpoint of its previous bear market.
On the contrary, a drop below the $45 to $50 range would indicate a broader downward trend. In this scenario, AVAX could potentially decline towards its weekly support level of $40. If selling pressure intensifies, this support level could act as a barrier, leading to a potential significant drop of 28% to the next key support at $28. Nevertheless, the likelihood of such a bearish outcome is currently considered minimal.
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