Avalanche eyes 60% rally as AVAX price breaks out of bull flag


Related articles

Avalanche (AVAX) strengthened its case for a possible upside run in direction of $160 within the coming periods because it broke out of a traditional bullish sample earlier this week.

Dubbed “bull flag,” the sample emerges when the worth consolidates decrease/sideways between two parallel trendlines (flag) after present process a robust upside transfer (flagpole). Later, in concept, the worth breaks out of the channel vary to proceed the uptrend and tends to rise by as a lot because the flagpole’s peak.

AVAX went via a similar price trajectory throughout the final 30 days, containing a roughly 100% flagpole rally to just about $150, adopted by over a 50% flag correction to $72, and a breakout transfer above the flag’s higher trendline (round $85) on Dec. 15.

AVAX/USD every day worth chart that includes Bull Flag sample. Supply: TradingView

AVAX price continued rallying after breaking out of its bull flag vary, reaching nearly $120 on Friday however eyeing an additional leg up in direction of its bullish continuation goal close to $160. The extent appeared after including the peak of AVAX’s flagpole, which is round $75, to the present breakout level close to $85.

Per week stuffed with bullish AVAX occasions

The latest shopping for interval within the Avalanche market picked momentum additionally due to a flurry of constructive catalysts this week.

AVAX jumped practically 10.50% on Tuesday as Avalanche added the native version of USDC, a dollar-pegged stablecoin issued by Circle, on its blockchain.

Moreover, a report penned by Financial institution of America analysts published on Dec. 10, referred to as Avalanche a viable various to the main good contract platform Ethereum. That coincided with AVAX gaining one other 16%.

AVAX/USD every day worth chart that includes key occasions within the week ending Dec. 19. Supply: TradingView

On Thursday, AVAX rallied to its two-week excessive after BitGo, a crypto custodian with over $64 billion price of property beneath administration, announced that it might help the token.

Nonetheless, a modest selloff on the native worth prime pushed AVAX decrease. Th get better Friday as Avalanche introduced that it has collaborated with web3 accelerator DeFi Alliance to launch a gaming accelerator program.

All of the occasions talked about above pointed in direction of the Avalanche ecosystem’s progress. As an example, with USDC, the mission promised to offer a viable various to Ethereum’s highly expensive Tether (USDT) stablecoin transactions.

Furthermore, by gaining BitGo as AVAX’s institutional custodian, Avalanche seems to be prepping for catering to accredited traders. Mike Belshe, CEO of BitGo, defined:

“Institutional custody will not be the identical as retail custody, and BitGo wallets and custody had been designed from the bottom as much as meet the wants of institutional traders, and BitGo is the one impartial certified custodian targeted on constructing the correct market construction and services to allow establishments to enter the digital asset house with confidence.”

AVAX worth dangers

One of many remaining draw back dangers round AVAX issues the crypto market efficiency, on the entire.

Intimately, AVAC rallied in every week that witnessed your complete cryptocurrency market capitalization lose greater than $114 billion, with main crypto property Bitcoin (BTC) and Ether (ETH) plunging over 7% and 5% week-to-date. Issues over the Federal Reserve’s tapering plans catalyzed the market selloff.

Due to this fact, it seems that merchants checked out AVAX as their short-term hedge in opposition to the crypto market drop, largely pushed by a string of constructive information. 

AVAX/BTC weekly worth chart. Supply: TradingView

Furthermore, the AVAX/BTC pair was up practically 40% week-to-date at round 0.00245 BTC on the time of writing, with the pair’s relative energy index (RSI) getting into overbought territory. That would immediate AVAX to weaken in opposition to BTC within the coming periods.

Associated: ‘Monster bull move’ means whales could secure the next Bitcoin price surge

An identical end result could also be potential in AVAX/USD’s case as its weekly RSI treads close to overbought ranges.

AVAX/USD weekly worth chart. Supply: TradingView

Nonetheless, the pair is prone to retain its bullish bias so long as it holds above its 20-week exponential shifting common (20-week EMA) as help. As proven within the chart above, the inexperienced wave has been capping AVAX’s draw back makes an attempt since August 2020.

The views and opinions expressed listed below are solely these of the creator and don’t essentially mirror the views of Cointelegraph.com. Each funding and buying and selling transfer includes threat, you need to conduct your personal analysis when making a call.