In a period where Bitcoin struggles to surpass $95,000, Avalanche’s price shows significant potential for a bullish continuation. The token has been forming consecutive lower highs and lows after being rejected from the key range at $22. While bears seem to control the rally in a broader perspective, AVAX’s price is indicating a hidden bullish divergence that could pave the way above the local threshold.
AVAX’s price experienced its second successful rejection from the neckline zone, presenting a great opportunity for short positions. Amidst the market downturn, there is a possibility of the price dipping towards the lower target, completing a large double top pattern that could impact AVAX’s price rally in the long run. Despite this, technical indicators do not strongly support a significant pullback, suggesting a period of tight accumulation ahead.
Bears have kept the rally below $22 since a major pullback in March, weakening the bulls’ strength. The Bollinger Bands are beginning to squeeze as volume decreases, indicating a drop in volatility. Meanwhile, the Chaikin Money Flow (CMF) has initiated a bullish rebound from levels not seen since July 2024. Historical data shows that a rebound in the weekly CMF from lows below -0.15 is followed by a substantial price increase of nearly 200%.
Therefore, AVAX’s price could see a strong rebound if it closes above $20 and sustains for a day or two. A break above $22 could confirm further upward movement towards $25, breaking free from bearish pressure. Failure to do so may keep AVAX’s price range-bound below $22 until significant bullish volume triggers massive buying pressure in the market.
