Avalanche Rises 15% in a Week: Can It Grow Higher?

Avalanche (AVAX) has made a solid move in the past week, with its price surging 15% to $22.01. This rebound comes after a period of struggling, as it’s still well below its January high of $44.

However, AVAX has shown promising signs of recovery, including a 12.88% jump from its recent low of $18.14. While these signs suggest optimism, the question remains: can AVAX continue to climb, or is this just a temporary spike?

AVAX Breaks Key Resistance

Avalanche’s impressive recovery has been driven by a combination of strong technical indicators and sustained buying interest. AVAX found solid support between $15 and $18, and since then, it’s been on a bullish run. On the 4-hour chart, technical indicators show bullish momentum. The RSI, which currently sits at 80.73, points to increasing buying pressure—anything above 70 typically suggests the asset is overbought, but in this case, it reinforces that buyers are in control.

Moreover, AVAX has broken past crucial resistance levels. The 50-day EMA, which was once a resistance point, has now flipped to support, while the 200-day EMA ($22.20) has also been surpassed. These breakouts signal a strong upward trend, and if AVAX manages to hold above these levels, we could see further gains in the coming weeks. The current price movement suggests that AVAX is attempting to reclaim its previous price range, which gives traders a reason to remain optimistic.

Growing Bullish Sentiment

One of the key indicators to look at when assessing the strength of a rally is the funding rate, and for AVAX, this metric has recently flipped into positive territory. Currently sitting at 0.0093%, the positive funding rate suggests that more traders are betting on long positions, anticipating that the price will continue to rise. This shift in sentiment is notable, as it marks a reversal from the bearish market sentiment that dominated the previous months.

This change is also reflected in the Long/Short ratio, with 51.86% of traders holding long positions compared to just 48.14% short. This increase in long positions has likely contributed to the surge in price, as buying pressure accelerates. A similar scenario occurred in the past when positive sentiment led to sharp rallies. The potential for another spike in price remains high, especially as more traders bet on AVAX’s continued growth.

A major catalyst for AVAX’s current price movement is the recent development involving investment giant VanEck, which has filed for an Avalanche ETF in Delaware. While it still awaits approval from the SEC, this move could be a game-changer for AVAX. If the ETF is approved, it would provide institutional investors with a more straightforward way to gain exposure to Avalanche, potentially driving even more demand for the token.

Key Levels to Watch: Will AVAX Break $25?

Despite the recent surge, AVAX still has a long way to go before reaching its all-time high of $146.22. For this bullish trend to continue, the token needs to clear critical resistance levels, particularly the $25 mark. If AVAX can break through and hold above $25, the path toward a $30 price range becomes increasingly likely. However, a failure to maintain momentum could lead to a pullback, with possible downside risks to around $18.45 or lower if selling pressure picks up.

A significant hurdle is the 0.5 Fibonacci retracement level at $21.86. It will act as a key point of resistance, and whether AVAX can break above it will determine if the current rally can continue or if the market will face another reversal. Traders should keep a close eye on these levels, as they will be critical in shaping the near-term future of AVAX.

As we look ahead, the next few days will be crucial for Avalanche. If the price holds above key support levels and volume remains strong, the chances of further growth are high.

For now, the outlook for AVAX remains positive, with bullish momentum, strong technical indicators, and institutional interest paving the way for future gains. Let's not forget that it can change quickly, so it’s essential to stay updated on the latest developments.