AVAX price premature rally could send the altcoin to $55 this week

Avalanche (AVAX) price is rising rapidly with renewed bullish momentum in 2024. This move comes after a sell-off on the last day of 2023. With sustained buying pressure, AVAX is likely to continue its ascent.

Read more: AVAX price could rally another 20% before it overheats

AVAX price initiates the next leg

AVAX price has increased 12% between January 1 and the current trading level of $43. This ascent comes in the first trading week of 2024 and likely has more legs to it due to the sell-off on December 31. This move collected the liquidity resting below the December 19 swing low of $38. 

One of the common bull rally continuation identifiers seen in altcoins is a sweep of the previous low and production of a higher high. Hence, the recent rally seems to hint at more gains in the near future for Avalanche token holders.

Going forward, investors can expect AVAX price to enter a resistance zone extending from $51 to $56. This move, from the current level of $43 to $55 would constitute a 27% move. 

Supporting this bullish thesis is a reset of the previously overbought Relative Strength Index (RSI) at the mean level of 50.

AVAX/USDT 1-day chart 

While AVAX’s technical picture shows a restart of the bull rally, investors need to be careful if the token fails to post a higher high above $49. This move would be the first sign of weakness. If this development is coupled with a lower low below $37, it will invalidate the bullish thesis.

In such a case, AVAX price could fall back into the weekly imbalance, which extends from $31 to $22. This would imply a 16% fall from current price levels.