• Fri. Jul 12th, 2024

Avalanche Declining Wedge Arrangement Forecasts 40% Growth

Maria Bartiromo

ByMaria Bartiromo

Jul 11, 2024

Analysts and traders have recently taken notice of Avalanche (AVAX) due to its falling wedge setup, which points to a possible 40% price increase. A standard bullish technical signal on trading charts described the falling wedge.

It is distinguished by two downward-sloping, convergent trend lines that form a narrowing wedge shape. This pattern usually develops following an extended period of decline and signifies a reduction in the selling pressure. Price typically breaks out to the upside as it gets closer to the wedge’s apex, indicating a reversal and the beginning of a new bullish phase.

The collapsing wedge pattern in the instance of Avalanche has been evolving over the last few weeks. The cryptocurrency price has dropped from a peak of over $140 in late 2021 to about $20 right as of press time. Larger market sell-offs, regulatory uncertainty, and macroeconomic issues affecting the cryptocurrency industry have been linked to this decline.

Bullish Trend Pre-requisite for Falling Wedge Pattern and Heavy Volume 

Many analysts believe that the AVAX chart’s falling wedge configuration indicates that a big rebound in cryptocurrency is imminent. While the top trend line indicates a level of resistance that, if broken, might lead to a sudden upward rise, the lower trend line has served as solid support, halting additional falls.

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Several technical indicators support the positive activity for AVAX. As a momentum oscillator, the Relative Strength Index (RSI) is currently in oversold condition. This implies that a reversal is likely, and the selling pressure has been overdone.

The possibility of an upward breakout is also supported by the Moving Average Convergence Divergence (MACD) indicator, exhibiting indications of a bullish crossover. A breakout from the falling wedge pattern and heavy volume would strongly confirm a bullish trend. AVAX’s price could increase due to several fundamental variables beyond technical analysis. 

AVAX To Test Upper Trendline Wedge, Promises to Enhance Transaction 

The platform has revealed partnerships with several well-known projects to improve its DeFi and NFT services. Investor confidence may increase due to the planned enhancements and developments of Avalanche.

The network will roll out several upgrades to boost its efficiency and attract additional customers. These enhancements are anticipated to speed up transactions and lower costs, increasing Avalanche’s competitiveness in the congested blockchain market. 

AVAX had started testing its upper trendline wedge as part of its resistance, targeting a decisive close above the estimated barrier. This is expected to happen in the coming days should there be a breakout. The estimated upside target for the AVAX, for August is projected to be about $38, which is approximately 40% from its present price level.

There could be a bearish divergence should the price of AVAX close above the wedge’s upward trend. However, the Relative Strength Index (RSI) is not attempting to break its declining trendline resistance, a situation that’s also believed to trigger a bearish divergence.

Avalanche Takes the Path of Cardano, Emerges Worse Performing Assets 

The price of AVAX is likely to drop, moving back into the declining wedge range after breaking out a little above its upper trendline. This trading pattern was witnessed in the declining wedge movement of the Cardano (ADA) markets.

Such a scenario may be seen in AVAX’s continued declining wedge pattern. It will continue with this trend until it reaches its climax, where the two similar trendlines meet at  $18.20. This level was important during the coin’s support days in late November 2023. AVAX has taken the path of Cardano, topping the worse-performing coins, with its year-to-date returning to around -35% as of July 10.

AVAX cryptocurrency dominance in the market has dropped to 0.50% from its initial 0.92% recorded during the same period. This is an indication of progressively weaker consumer demand as against the broader cryptocurrency market.

Cardano and Avalanche have grossly underperformed relative to what’s applicable in the rivalry seen in the layer-1 blockchain token and, by extension, Toncoin (TON). The positive performance of the TON has been grossly linked to Telegram activities, considering its 900 million global users.

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Maria Bartiromo

Maria Bartiromo

Maria Bartiromo is a renowned news writer and journalist, celebrated for her insightful reporting and authoritative voice. With a career spanning years, she has established herself as a trusted source of accurate and comprehensive news analysis, keeping readers informed on vital global developments.

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