Summary
- The price of AVAX has more than doubled since the start of 2023, but a divergence between several key metrics suggests a bearish reversal ahead.
- Avalanche recently partnered with Intain to launch its digital marketplace IntainMARKETS, helping to rally the price by nearly 20%.
- If AVAX is able to break out above $22.75 resistance, it could see gains of up to 30%. Conversely, a pullback from the resistance level could send AVAX’s price lower.
AVAX Price Rally in 2023
The price of AVAX has more than doubled in 2023, reaching as high as $22.50 as of Feb. 2. This surge was largely fueled by improving risk-on sentiments and news of its partnership with Amazon. On Jan. 31, Avalanche announced that it had partnered with Intain, a structured finance platform that facilitates more than $5.5 billion in assets across more than 25 deals, to run its digital marketplace IntainMARKETS via IntainMARKETS Subnet. The announcement helped rally the price of AVAX nearly 20%.
Bearish Reversal Ahead?
Despite this impressive rally however, a growing divergence between several key metrics hints at an impending bearish reversal ahead for AVAX. On the daily-timeframe chart for example, there is a classic bearish divergence between its price and relative strength index (RSI), forming since Jan 11th 2021. In addition, declining volumes during the course of the uptrend also point towards bearish cues.
Breakout Target: $30
AVAX has successfully closed above two key resistance levels – a multi-month descending trendline (black) and its 200-day exponential moving average (200-day EMA; blue wave). Now eyes are on another potential breakout above $22.75 which has been serving as resistance since August 2022 – if successful this could push prices towards $30 over time – an approximately 30% gain from current levels.
Risk Factors
Conversely however should prices fail to breakout and pull back from current levels due to diverging indicators and declining volumes then prices may fall back significantly – possibly down by around 30%.