Why is Avalanche (AVAX) Price Up?

The Avalanche (AVAX) price is surging today, with its price pumping around 15% to trade near $48 at the time of writing. This puts AVAX within striking distance of its 2023 yearly high around $48.30 set back in December.

A few key technical indicators help explain today’s bullish price action for AVAX. The relative strength index (RSI), a momentum indicator, is reading in an overbought range between 60-70 across most timeframes except on the daily chart where it sits around 50. An overbought RSI suggests the asset could be due for a short-term pullback, but the daily RSI still has room to rise further.

The moving average convergence divergence (MACD) indicator also paints a bullish picture, with the MACD line currently above the signal line. This indicates the uptrend could persist over the short term. Additionally, the 200-day simple moving average for AVAX is around $25, well below the current price, so the overall long-term trend remains bullish.

Where Could AVAX Go From Here?

With a market cap now over $18 billion, AVAX is trying to break through key resistance around the $50 level, which aligns with the 1.618 Fibonacci extension level. A confirmed breakout above $50 could open the door for a run towards the next Fib extension at $55.

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While $63 represents a more ambitious upside target, in line with the 4.236 Fib extension, traders will likely keep a close eye on $45.72 as a strong support level. This price coincides with the 0.786 Fibonacci retracement of the current uptrend.

Overall, the technical picture looks constructive for AVAX over the near term as long as it can maintain its momentum above the $45-$46 support zone. However, the overbought RSI readings suggest some consolidation or a minor pullback could be looming before the next potential leg higher.

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Petar Jovanović
Petar Jovanović

As the Head of Content at Captainaltcoin, I bring years of experience in the crypto industry. With a strong belief in the potential of the web3 market since 2017, I'm passionate about sharing valuable insights and knowledge. Feel free to connect with me on LinkedIn and let's discuss the exciting world of cryptocurrencies and decentralized technologies!

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