AVAX was among the cryptocurrencies that saw significant upside potential after hitting their recent bottoms. A healthy sign that there has been some accumulation after its price fell to recent lows. However, zooming out shows that it has been trading in a falling wedge pattern and a breakout is imminent.
AVAX is currently locked in a tight price range that has been capped by descending resistance and support lines over the past several years. The move down mid last week led to a retest of the support line on June 13th and 14th. He then registered a slight upward movement that pushed him towards the resistance line as the two lines converge. This means that if the price breaks out, it is due either to the upside or down.
No avalanche of buying pressure?
AVAX only recovered slightly after the support retest. A sign that any accumulation that took place at the recent lows was not enough to trigger a major uptrend.
AVAX was trading at $16.31 at press time, a modest gain from its recent low of $14.58. However, it was a rally of more than 10% making it one of the top gainers of the past 24 hours.
AVAX indicators show a significant probability of a bullish wedge pattern breakout. Its RSI recently dipped into oversold territory and the MFI indicator was showing significant accumulation at its recent low at press time. The -DI also saw some downside movement over the past two days, suggesting that the bears have lost some of their momentum. However, the bears failed to register any significant momentum uplift, likely due to the prevailing market uncertainty.
On the on-chain side, Avalanche’s Binance funding rate metric has improved slightly since June 13. This is a sign that AVAX demand has improved slightly after the recent crash and is consistent with the slight price increase. The market cap also saw a significant improvement from its recent low of $4.3 billion on June 13 to $4.8 billion on June 15.
NFT trades on Avalanche have also improved over the past few days. Total NFT trading volume peaked on June 14 at $2.27 million. This was the highest NFT trading volume in the past four weeks.
AVAX metrics show that it is on a recovery path and this reflects the price chart’s observations. However, there is still a risk of further downside if the market fails to secure enough buying volume for a significant rally.