Avalanche (AVAX) saw a significant price spike of 9.1% in the past 24 hours, bringing its price to $27.96. This surge followed speculations about an AVAX ETF on X by Quinten Francois, a crypto influencer with over 115k followers. Last week, AVAX suffered a price drop due to the BtcTurk exchange hack.
Quick Take
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AVAX price increased by 9.1% in the past 24 hours supported by rumors of an AVAX ETF following VanEck’s Solana ETF filing.
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Formation of a falling wedge, crossing above the 50-day SMA, and RSI approaching 60.
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If AVAX breaks above the wedge, a 76% rally could push the price to $58.
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An increase in open interest by 6.14% indicates accumulation among AVAX traders.
Why Is Avalanche Price Surging?
AVAX/USDT price chart | Source: KuCoin
The recent AVAX price surge follows speculations about an AVAX ETF on June 27. This speculation was sparked by VanEck’s filing for a Solana ETF, categorizing the asset as a commodity. A crypto investor, Quinten Francois, shared a list of altcoins likely to see ETF filings soon, with Avalanche being a top contender.
Source: @quintenfrancois on X
Read more: VanEck Files for First Solana ETF in the U.S.: A Potential Game Changer?
AVAX Technical Analysis: 76% Rally in the Cards?
AVAX hit a yearly high in March but began to decline, forming a falling wedge. Falling wedges are bullish patterns that often lead to an upward breakout. Recently, AVAX crossed above the 50-day simple moving average (SMA) but remains below the 200-day SMA. The 14-day relative strength index (RSI) dipped into the oversold area before recovering and is now approaching the midpoint of 43, aiming for 60, where resistance exists.
If AVAX breaks above the falling wedge, it could rally by 76%, bringing the price to $58. However, if bearish trends continue, the price could find support around $23.51 and $19.54.
On a lower time frame, AVAX broke out of an inverted head and shoulders pattern. This pattern suggests a 7% upside move, potentially raising AVAX’s price to $30.07.
AVAX Registers 6.41% Increase in Open Interest
Data from Coinalyze shows a 6.14% increase in aggregate 24-hour open interest (OI) for AVAX, indicating investor accumulation and anticipation of further price movement. According to Santiment, the AVAX rally is largely ignored by the crowd, reducing the risk of a sudden correction due to FOMO (fear of missing out).
Bullish Reversal Indicators
Avalanche NVT Ratio | Source: AMBCrypto
AVAX shows promising signs of a bullish reversal, supported by recent market dynamics and buying pressure. However, for a full bullish reversal, several factors need to align:
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NVT Ratio: AVAX’s network value to transactions ratio is in a downtrend, suggesting potential undervaluation.
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Ichimoku Cloud: AVAX needs to break above the Ichimoku cloud, with the Tenkan-Sen crossing above the Kijun-Sen within or above the cloud.
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MACD Indicator: A bullish reversal requires the MACD line to cross above the signal line, and the price to break above the middle Bollinger Band.
Current Bearish Signals
Despite bullish indicators, some bearish signals persist:
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Ichimoku Cloud: The cloud shows a red phase, indicating potential bearishness.
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Tenkan-Sen and Kijun-Sen: The blue line (Tenkan-Sen) is below the red line (Kijun-Sen), another bearish signal.
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MACD Line: Currently below the signal line and trending downward, led by bears.
Conclusion
Avalanche (AVAX) is at a critical juncture. Bulls are positioning for a breakout, driven by ETF speculations and technical patterns. However, bearish indicators suggest caution. For a sustained bullish reversal, AVAX needs to break above key resistance levels and see supportive market indicators.
