Avalanche (AVAX) is making waves in the cryptocurrency market as its price approaches the significant $50 resistance level. The bulls showed impressive strength, which gives us optimism about a potential breakout. A successful move above $50 can signal the beginning of a solid rally, capturing traders’ attention and setting the stage for further gains.
The purpose of this article is to examine AVAX’s upside momentum as it approaches the $50 resistance level and assess the possibility of a breakout. It also delves into the technical and market factors influencing price action, offering insight into whether bulls can push AVAX higher or if resistance will trigger a pullback.
Building Bullish Momentum: Can AVAX Breakout?
On the 4-hour chart, AVAX is trading above the 100-day elementary moving average (SMA), a key indicator of its current upward trajectory. Importantly, this alignment highlights the token’s underlying strength and suggests that positive sentiment is driving its momentum. The steady upward move reflects growing optimism among traders, and Avalanche is currently eyeing the critical resistance level at $50.
Analysis of the 4-hour Relative Strength Index (RSI) shows that the RSI has climbed back above the 70% mark after falling to 52%, signaling a resurgence in buying pressure and reflecting a renewed augment in market movement. Sustained growth would indicate forceful overbought conditions, suggesting forceful demand and the potential for more price growth.
Additionally, the daily chart shows a forceful uptrend in AVAX, characterized by the formation of a bullish candle as the price increases towards $50. Its position above the SMA reinforces the positive trend, showing sustained strength. This upward move strengthens market confidence, setting the stage for further growth.
Finally, the RSI indicator on the daily chart recently reached 75%, which indicates that AVAX has entered overbought territory. This suggests forceful bullish sentiment, with significant purchasing pressure driving the price higher. While this level indicates the potential for further gains, it also signals that the asset may be overheating.
Breakout or pullback on the horizon?
As Avalanche approaches the key resistance level at $50, two possible outcomes emerge: a breakout or a pullback. If the bullish momentum continues, AVAX could break above the $50 mark, triggering a rally towards higher levels. This would mean a continuation of the uptrend, with the next target being the resistance level at $65.
However, if the resistance at $50 holds, a pullback could occur and the price is likely to test the support level at $42. A break below this level could lead to further declines, pushing AVAX towards additional support zones.
