As Bitcoin struggles to break past $95,000, Avalanche (AVAX) emerges as a potential candidate for a bullish continuation. Despite facing lower highs and lows post-rejection from the $22 range, AVAX is showing signs of hidden bullish divergence that could pave the way for a move above current resistance levels.
Following its second rejection from the neckline zone, AVAX presents an opportunity for short positions amidst a bearish market sentiment. The possibility of a dip towards lower targets to complete a double top pattern looms, potentially impacting the token’s rally in the long term. However, technical indicators do not strongly support a significant pullback, suggesting a period of consolidation may be on the horizon.
The $22 level has been a strong resistance for AVAX since a major pullback in March, indicating bearish control over the rally. The Bollinger Bands are narrowing as volume decreases, signaling reduced volatility. Additionally, the Chaikin Money Flow (CMF) has shown a bullish rebound from levels last seen in July 2024. Historically, a rebound in the weekly CMF from lows below -0.15 has preceded significant price surges of up to 200%.
If AVAX manages to close above $20 and sustain it for a couple of days, a breakout above $22 could be confirmed, potentially pushing the price past $25 and breaking free from bearish constraints. Failure to do so may keep AVAX consolidating below $22 until a surge in bullish volume triggers substantial buying pressure.