Avalanche (AVAX) has surged over 13% in recent trading sessions, signaling a strong rebound from a long-term support zone. After months of downward pressure, the cryptocurrency appears to be staging a potential reversal as bullish momentum builds across key technical indicators. With buyers stepping in decisively near $15.20, market sentiment is shifting, and traders are eyeing a possible new upward impulse wave.
This recovery isn’t just noise—it’s backed by structural patterns, momentum signals, and confluence from multiple timeframes. In this analysis, we’ll break down the technical landscape, examine Elliott Wave structures, assess RSI divergence, and highlight critical levels that could determine AVAX’s next major move.
Technical Structure Suggests Correction May Be Ending
Avalanche (AVAX) entered a corrective phase following its peak near $65 in early 2024. Over several months, price action formed a complex WXY correction pattern—a common structure in Elliott Wave Theory used to describe extended sideways or downward consolidations.
The final leg of this correction, labeled as wave “Y,” found its conclusion around the $15.20 level. This zone aligns with historical demand and coincides with the lower boundary of a long-term descending channel. The fact that AVAX has rebounded sharply from this area—already reclaiming $17—suggests exhaustion among sellers and renewed interest from buyers.
The completion of this multi-phase correction opens the door for a new impulsive bullish move, especially if price sustains above key support at $16.50. A confirmed break above the descending channel resistance could act as a catalyst for broader market participation.
Early Signs of a New Bullish Impulse Wave
On the 1-hour chart, AVAX is showing early signs of a five-wave impulsive structure to the upside—an indication of strong directional momentum returning to the market.
According to Elliott Wave principles:
- The recent low likely marked the end of a corrective ABCDE pattern.
- What’s unfolding now may be wave (i) of a larger-degree bullish impulse.
- A pullback forming as wave (ii) appears to be holding above $16.50, creating a higher low—a hallmark of healthy trend development.
If this count holds, wave (iii)—typically the strongest and longest leg—could propel AVAX toward the $20–$22 range. This zone corresponds with the upper resistance of the current descending channel and would represent a major shift in trend dynamics if cleared convincingly.
For traders watching for confirmation, a decisive close above $18.50 would add strong validation to the emerging uptrend.
RSI Shows Bullish Divergence and Oversold Rebound
Momentum indicators are adding weight to the reversal thesis. The Relative Strength Index (RSI) on both the 4-hour and 1-hour charts displayed deeply oversold conditions during the final leg down to $15.20.
More importantly, a bullish divergence emerged:
- Price made a lower low at $15.20.
- RSI, however, formed a higher low—indicating weakening bearish momentum.
This type of divergence often precedes significant trend reversals in crypto markets, where emotional selling gives way to accumulation and eventual rally.
As AVAX climbs back above $17.50, RSI is recovering into neutral territory, leaving room for further upside without entering overbought zones. A sustained move above 60 on RSI would confirm strengthening buyer control.
Key Support and Resistance Levels to Monitor
Understanding where supply and demand are concentrated is crucial for managing risk and identifying opportunity. Here are the most important levels for AVAX in the near term:
Resistance Zones
- $18.50: Immediate resistance, marked by the recent swing high. A breakout here confirms short-term bullish momentum.
- $22.00: Key confluence level—top of the descending channel and potential target for wave (iii).
- $28.95: Major resistance at the 0.236 Fibonacci retracement level of the previous downtrend. Clearing this would signal a full shift in market structure.
Support Zones
- $16.50: Critical short-term support. A break below invalidates the current wave (ii) count and raises risk of further downside.
- $14.00: Critical support zone. Only a strong bearish resumption would push price this low.
- Below $14.00: Invalidation zone for the bullish scenario. Should price close below this level, the broader correction may extend.
FAQ: Frequently Asked Questions About AVAX Price Movement
Q: Is AVAX showing signs of a lasting recovery?
A: Yes—multiple technical factors support this view, including completion of a multi-wave correction, RSI bullish divergence, and early formation of an impulsive upwave. However, confirmation requires sustained trading above $18.50.
Q: What is the next major price target for AVAX?
A: If the bullish wave structure plays out, AVAX could target $22.00 in the short term, with longer-term potential toward $28.95 if momentum continues.
Q: What would invalidate the current bullish outlook?
A: A drop below $14.00 would undermine the reversal thesis and suggest further downside risk. More immediately, failure to hold $16.50 would raise concerns about buyer strength.
Q: How reliable is Elliott Wave analysis for cryptocurrencies like AVAX?
A: While no model is perfect, Elliott Wave Theory provides valuable context in trending or consolidating markets. When combined with volume and momentum indicators like RSI, it becomes a powerful tool for forecasting potential turning points.
Q: Can Fibonacci retracement levels predict AVAX’s upside potential?
A: Yes—Fibonacci levels help identify where buyers may step in during recovery phases. The 0.236 retracement at $28.95 is particularly significant given its alignment with prior resistance zones.
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Final Outlook: Bullish Reversal Gaining Traction
The technical setup for Avalanche (AVAX) is increasingly constructive. After a prolonged correction that tested investor confidence, buyers have successfully defended a critical support zone near $15.20.
With price reclaiming $17 and momentum shifting upward, AVAX is positioned for a potential multi-week recovery phase. The combination of completed corrective patterns, bullish RSI divergence, and emerging impulse waves paints an optimistic picture for those anticipating a trend reversal.
That said, confirmation remains key. Traders should watch for:
- A sustained close above $18.50.
- Continued strength in RSI without premature overbought signals.
- Volume expansion on upward moves.
Should these conditions align, AVAX could break out of its long-standing downtrend and set its sights on $22 and beyond.
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Disclaimer: The information provided in this article is for informational purposes only. It does not constitute financial advice. Cryptocurrency investments are subject to high market risk. Past performance is not indicative of future results. Please consult with a qualified financial advisor before making any investment decisions.