Avalanche’s native token AVAX has seen some declines this week, dropping around 10% which is in line with broader weakness across major altcoins like LINK, DOT, and DOGE. However, AVAX holders should not be overly concerned by this pullback after AVAX’s exceptionally strong performance over the last year.
In 2023 AVAX was one of the top performing major altcoins, gaining over 200% and massively outperforming Bitcoin and Ethereum. It reached a peak of around $48 in late December before pulling back.
At the time of writing, AVAX is trading around the $35 level which could prove to be an important support area.
According to analysis by altFINS, AVAX recently broke above resistance at $35 and rallied towards the next target of $50 before becoming extremely overbought based on the RSI indicator. This overextended move likely attracted some profit-taking which has caused the pullback.
Key potential support levels identified are the 50% Fibonacci retracement level at $34, then the prior swing low around $31. The $34-39 zone is highlighted as an area where AVAX could stabilize and potentially bounce back from if buyers return.
Source: altFINS – Start using it today
Summarizing altFINS’ view – the short-term trend is now neutral but the medium and long-term outlook remains bullish. Momentum indicators like the MACD and RSI show mixed signals in the short-run. If the $31-34 support area holds, AVAX could regain upside momentum back towards $50 resistance.
Another analyst ChampsMoneyConcepts sees more potential downside in AVAX based on a head and shoulders topping pattern forming and a break of critical support on the daily chart. They anticipate a deeper pullback to test the key rising trendline support. This would line up with retesting the $25 level which aligns with the 61.8% Fibonacci level that altFINS highlighted.
So in summary, analysts opinions differ on whether this AVAX pullback will find support and stabilize shortly or if more downside is in store before any renewed uptrend. Key support levels between $25-35 will be important to monitor on whether buyers return.
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