AVAX price premature rally could send the altcoin to $55 this week
- AVAX price shows a recuperation of bullish momentum, hinting at another rally.
- Investors can expect Avalanche to head into the weekly resistance zone, extending from $51 to $56.
- A failure to produce a higher high above $49, coupled with a lower low below $37, will invalidate the bullish thesis.
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.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
