- AVAX could soar by 21% to reach the $25.15 level if it closes a daily candle above the $21 mark.
- The altcoin’s bullish thesis will only hold if it closes a daily candle above the $21 level, otherwise, it may fail.
After a price decline of over 70%, Avalanche [AVAX] is poised for an upside rally. This bullish speculation is driven by the current price action and growing interest from traders and investors in the asset.
169% jump in large transactions
On-chain analytics firm IntoTheBlock revealed that participation from whales and investors in AVAX has skyrocketed, resulting in a 169% jump in large transaction volume at press time.
This surge in the asset’s trading volume appears to be a bullish sign, as it coincides with AVAX breaking out from a bullish price action pattern.
Source: IntoTheBlock
At press time, AVAX was trading near $20.05, having recorded a price decline of 2.50% over the past 24 hours.
During the same period, its overall trading volume jumped by 22%, indicating heightened participation from traders and investors.
This surge in trading volume reflects strong interest from traders, and if it follows a breakout, it indicates a bullish opportunity.
AVAX price action and key levels
According to AMBCrypto’s technical analysis, AVAX appeared bullish at press time, supported by several bullish factors and patterns across both lower and higher time frames.
On the weekly time frame, AVAX appeared to be hovering within a descending channel pattern, after successfully retested the lower boundary by forming a strong bullish engulfing candlestick pattern.
Source: TradingView
Whereas, on the daily time frame, AVAX has broken out of a descending channel pattern and is now on the verge of breaking out of a bullish cup and handle pattern.
The recent breakout above a strong bearish hurdle, along with the potential cup and handle formation, signals a massive upside potential.
Source: TradingView
The daily chart further revealed that AVAX was trading near the neckline of a bullish pattern, which appeared to be a make-or-break point for the asset.
Based on recent price action, if the price breaks out and closes a daily candle above the $21 level, there is a strong possibility it could initially rally by 21% to reach the $25.15 level.
If the upside momentum continues, it could further propel the asset by another 25%, reaching the $31.40 level in the coming days.
Mixed sentiment from technical indicators
At press time, AVAX was trading below the 200 Exponential Moving Average (EMA), indicating that the asset was in a downtrend with weak momentum.
However, its Relative Strength Index (RSI) was near 56, suggesting that AVAX had sufficient room for an upside rally. Having crossed the neutral zone, the RSI signaled that the asset could gain further bullish momentum.
AVAX’s bullish thesis will only remain valid if the asset closes a daily candle above the $21 level, otherwise, the rally may fail.