- Avalanche was on a bullish wave toward the end of last year, but it has since lost momentum and dipped over 35% to bottom just below $32 on January 8.
- It has since reversed the move and is now on an uptrend as it closes in on $40, but can it reach $50 and set a new all-time high in this bull cycle, or will it peter out?
Avalanche was one of the best performers toward the end of last year, surging fivefold to hit new highs around Christmas and set a new all-time high. It lost this momentum as the new year kicked in, and by January 8, it had shed over 35% of its Christmas gains. It has since reversed the trend and has been gradually regaining its losses as it edges closer to the $40 price level, but will it finally break past the resistance and hit $50 for the first time in its history?
At press time, AVAX is trading at $38.78, and despite some sharp movements in that time, it’s price has changed by a mere 0.05%. However, it set an intra-day high at $41.6 before dipping to an intra-day low of $38.1 in a volatile 24 hours.
Interest in AVAX has dropped in that time, with its trading volume just cracking $1 billion after a 13% dip in the past day. It still holds the ninth position on the charts with a $14.2 billion market cap, edging Dogecoin and Polkadot, which follow closely.
What Next for Avalanche (AVAX)?
AVAX’s relative strength index stands just short of 60, according to data from Crypto Waves, which indicates that the asset is approaching the overbought territory. An RSI reading above 70 indicates that an asset is trading above its fair value and is often a sign that the price is heading for a dip.
In its sharp rise over the last three months of 2023, Avalanche created an ascending wedge trading pattern that saw it fall just short of hitting $50. It has since broken away from this pattern, but with the downtrend reversal on January 8, it created a higher low, which usually sets an asset up for higher highs.
The green icon on the graph below shows that this low is much higher than Avalanche’s previous lows. The ascending wedge patterns that AVAX has recorded since October last year have ended up with the token hitting new highs with each cycle—$23.73 in the first one that ended on November 16 and $49.4 in the one ending on December 24.
Analysts believe that Avalanche is heading for greater gains. One analyst from Bound Finance warned investors against forgetting AVAX, which he noted has made an impressive recovery.
He posted:
Around this time last year, things were looking bleak for the ecosystem. However, today, they have completely turned the tables. Take a look at the one-year comparison between December 23rd, 2022, and today: Daily active addresses: 41.01k vs 82.48k (that’s a 2x increase).
Transactions have spiked from 154,000 to over 5.8 million, while TVL has grown from $787 million to almost a billion dollars. DEX volume was at $13.46 million at a time like this last year but is now close to $200 million.
The analyst added:
With more than 4m AVAX tokens recently burned and more updates to keep the token supply deflationary, we should expect the token to quickly reclaim ATH and even surpass it in the bull run.
