Avalanche (AVAX) Takes a Tumble into 2024 After an Impressive 2023 – Can it Hit $50?

Avalanche (AVAX) has hit a stumbling block after its 2023 high of almost $50 on December 24. The decline peaked on January 8, but since then, there’s been an upward shift in the AVAX price.

Avalanche’s Slide Before the $50 Mark

AVAX witnessed a rapid surge starting in September 2023. In just 90 days, its price shot up by nearly 500%, reaching a yearly peak of $49.95 on December 24. However, this surge was followed by a decline, breaking out of an ascending wedge and hitting a low of $31.20 on January 8, 2024. A bullish candlestick emerged that same day (the green icon), and since then, AVAX has been on the rise.

Reading the Charts and Analyst Insights

The weekly RSI remains uncertain. Traders typically rely on the RSI as a momentum indicator to gauge market conditions, whether it’s time to buy or sell an asset. A reading above 50 with an upward trend indicates an advantage for the bulls, while a reading below 50 suggests the opposite. AVAX’s RSI fell below 50 (as marked by the red circle), but attempts are being made to move above this level again.

Analysts and cryptocurrency traders on X are optimistic about AVAX’s future. Mars_DeFI, for instance, sees positive signs in various metrics like daily active addresses, daily transactions, total value locked (TVL), and more. Umutak47 notes a breakout from a descending resistance trend line, and MisterCh0c points out that even the typically bearish trader Capo foresaw the AVAX increase.

Predicting AVAX’s Future: Is a Local Top in Sight?

A closer look at the daily time frame readings hints that AVAX might have reached a local top. The wave count suggests AVAX completed a five-wave upward movement, supported by a bearish divergence in the daily RSI during the top (depicted in green). If correct, AVAX is now in an A-B-C corrective structure (depicted in white), likely to increase towards $45, complete the B wave, and then experience a 25% drop to finish wave C at the 0.5 Fib retracement support level at $29.

Despite this bearish prediction, surpassing $50 (marked by the red line) would signal the end of the correction. If that happens, AVAX could increase by another 70% and reach the next resistance at $66.

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