The Avalanche community is eagerly anticipating a potential bullish reversal for AVAX after experiencing a downtrend over the past three months. This optimism is being driven by ecosystem developments and increasing adoption of the cryptocurrency.
Trader Marzell recently informed his followers that AVAX was testing a key support zone between $15 and $20. He suggested that if this support level holds and AVAX closes the week above $30, the cryptocurrency could see a strong rebound, potentially reaching $43.84. He also mentioned the possibility of AVAX climbing even higher to $58.06 and $80.03 if it breaks past the initial resistance levels.
Another well-known trader, Kaleo, shared a chart indicating that AVAX was in an accumulation zone, similar to a pattern seen in November last year before it surged by 125%. This hint at a potential rally has sparked optimism among traders and investors.
As of the afternoon of March 7, AVAX was trading at around $20.64, with a market capitalization exceeding $8.5 billion and a 24-hour trading volume of $538 million. Despite being 85.8% below its all-time high of $144.96, recorded in November 2021, there are several positive catalysts that could support AVAX’s recovery.
Firstly, Avalanche CEO Emin Gün Sirer hinted at attending the White House Crypto Summit, leading to speculation that AVAX could be included in the nation’s crypto strategic reserve plans. This potential government support, especially in line with the “Made in USA” narrative, could benefit AVAX significantly.
Secondly, the Avalanche community is preparing to integrate Balancer V3 into the Avalanche DeFi ecosystem. This latest version of the decentralized automated market maker will introduce advanced liquidity tools and new trading strategies, further enhancing the ecosystem.
Thirdly, Avalanche has been making strides in real-world asset tokenization, with recent adoption by an Indian town to tokenize over 700k land records. This real-world utility has been well received and showcases the potential of AVAX beyond the crypto space.
Despite these positive developments, technical indicators are currently flashing bearish signals for AVAX. The cryptocurrency has fallen below a descending trendline and shows signs of consolidation. The MACD and signal line are closely aligned below the price level, indicating a period of consolidation. Additionally, the Arron Up and Aroon Up indicators confirm strong selling pressure, suggesting a dominant downtrend.
At present, Avalanche (AVAX) is likely to continue its downtrend unless there is a shift in sentiment. It was trading at $20.5 per coin, down 6.5% over the past day. Investors should exercise caution and conduct thorough research before making any investment decisions.