- AVAX faces resistance between $26 and $30, suggesting a likely pullback before resuming its upward momentum.
- A potential ABC correction could bring the price down to $21–$22 before a fresh rally targets higher levels.
Avalanche (AVAX) has encountered a significant resistance zone between $26 and $30, raising the chances of a short-term pullback before it can resume its upward momentum. Recent technical analysis points to the completion of an impulsive five-wave rally, but with signs of waning bullish momentum, a correction seems likely before the next leg up.
AVAX’s Recent Rally and Resistance Challenge
After forming a multi-month corrective structure (W-X-Y-X-Z) and bottoming at around $14.68 in April, AVAX launched into an impulsive rally. The price surged to a recent high of approximately $27.65, but the resistance zone at $26 to $30 has proven tough to break. This price area aligns with key Fibonacci levels and prior structural resistance, making it a critical point for future price action.
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Signs of a Correction
A bearish divergence in the Relative Strength Index (RSI) on the 4-hour chart signals that the bullish momentum is weakening. While AVAX reached new highs, the RSI failed to mirror the strength, which suggests that a pullback could be imminent. The price has since pulled back to around $24.50, slightly below the 0.236 Fibonacci retracement level, and if this support fails, deeper retracements toward $23.43, $21.19, or even $19.20 could occur.
AVAX’s Next Moves: Pullback or Continuation?
The current price action suggests that an ABC corrective pattern is underway. Wave (A) has already dropped the price to around $24.40, and a short-term bounce to the $25.80–$26.20 zone for wave (B) is possible. The next phase, wave (C), may bring the price down to the $21–$22 range to complete the correction. If this occurs, it could reset overbought indicators and set the stage for another impulsive rally toward higher Fibonacci levels, including $29.95 and $32.87.
While short-term bearish pressure is mounting, the broader bullish structure remains intact. A deeper correction appears probable, but as long as AVAX holds key support levels, it could set up for a fresh breakout once the correction completes. Traders should remain cautious of potential pullbacks, but the overall outlook for AVAX remains positive in the medium to long term.
