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Avalanche analysis – Amazon partnership ensures price strength

5 min read

After a bearish second half of 2022, the former top 10 cryptocurrency Avalanche can come up with several positive news at the beginning of the year. Next to one Partnership with the software provider Shopify for online shops and the possibility of being able to offer retailers non-fungible tokens (NFTs) on the Layer1 solution Avalanche in their stores was the main reason for the announced partnership with the online giant Amazon in the past few trading days for a significant price jump.

The AVAX course thus seems to have shaken off its weakness of the last few months for the time being. Avalanche gained around 32 percentage points in value on a weekly basis and is currently one of the outperformers in the crypto market. If AVAX continues its positive trend of the last few weeks and stabilizes above the purple support zone in the area between USD 14.37 and USD 14.76 and overcomes the horizontal resistance line at USD 15.85 at the daily closing price, a subsequent increase to at least USD 17.51 ​​will follow probably. This would also confirm AVAX price’s break out of the wedge (red), which should give further momentum to Avalanche.

Price Analysis Avalanche (AVAX) 01/13/22
Course analysis based on the pair of values AVAX/USDT on Binance

Bullish price targets: $15.85, $17.51, $19.78/21.42, $23.51, $25.89, $29.19, $32.23, $36.72, $40.95, 44 $.56, $55.09/$59.67, $69.72

Avalanche: Bullish price targets for the coming months

First of all, the buyer side has to confirm the breakout above the upper edge of the falling wedge. A dynamic price increase above USD 15.85 in the direction of USD 17.51 ​​would be a clear indication of a continuation of the trend. If the bulls succeed in this endeavor and the horizontal resist at USD 17.51 ​​is also pulverized, the first relevant target area will come into focus. There is a whole bunch of resistance levels between USD 19.78 and USD 21.42. In addition to the intermediate high from November 2022, the EMA200 (blue), the higher-level 50 Fibonacci retracement and the golden pocket of the current trend movement are running here. This is where the first investors will realize profits from the price rally since the beginning of the year.

A rebound to the south is therefore very likely. As long as the blue resistance zone is not sustainably overcome, a bear counterattack must be expected at any time. Should Avalanche break through this area in the coming weeks and stabilize above it, the chart picture will brighten significantly. If the AVAX price can also jump over the horizontal resist at USD 23.51 in a positive market environment, the upward movement extends to the green resistance zone. The next relevant chart technical hurdle is found here with the high from August of the previous year. The marks of USD 25.89 and USD 29.19 in particular represent strong resistance levels. A price pullback at the first attempt must therefore be planned for.

Further price potential activated at Avalanche

If this zone is also recaptured in the future and the AVAX price can subsequently break through the cross-resist at USD 32.23, the currently bearish market structure will change to bullish. A quick march through to USD 36.72 should therefore be planned for. Here the buyers’ camp must then once again use all their strength to overcome this important technical chart level. However, a temporary correction back towards $30.89 would not threaten the trend. If Avalanche then breaks through USD 36.72 together with a resurgent Bitcoin price, the next target area between USD 40.95 and USD 44.56 is activated.

This area was already of increased relevance several times in 2021 and 2022. Only when this zone can also be skipped at the end of the week will the old spoiler lip from the beginning of May 2022 return to the focus of investors as a target area. The resistance at USD 55.09 is to be regarded as the maximum bullish price target for the time being. Only if investors were able to pulverize the yellow resist area and dynamically break through the upper edge of this zone at USD 59.67 would a subsequent increase up to the long-term maximum price target of USD 69.72 be conceivable at all.

Bearish price targets: $14.74/14.37, $13.72, $12.92, $12.13, $11.43/11.12, $10.55, $9.33, $7.03/6, $46, $4.97

Avalanche: Bearish price targets for the coming months

The bears have recently fallen behind after a strong start to the year for AVAX. In the last two trading days, however, the seller has repeatedly prevented a direct breakout above the important resistance level at USD 15.85. If Avalanche falls back below the red downtrend line along with another correction in the crypto market and sustainably abandons the purple breakout zone around $14.74, a false breakout is at stake.

If the bulls can then generate enough selling pressure and also break through the horizontal support at USD 13.72, a renewed fall to at least USD 12.92 (EMA50) is more likely. However, a sell-off up to the super trend at USD 12.13 is to be expected. Here, the bulls must fly the flag to stave off a price drop towards the December low. However, if the buyer side remains abstinent here as well, the correction should quickly expand to USD 11.43. Abandoning this area would inevitably result in a retest of the last lows between USD 11.12 and USD 10.55.

New historical lows are likely

If Avalanche fails to form a double bottom and AVAX slips to a new historical low, the trend movement south would likely extend to around the 2022 low at $9.33. Here, a renewed entry makes sense due to a good risk-reward ratio. If, on the other hand, an attempt at stabilization fails and the countermovement is countered by the bears, the AVAX price is likely to fall again significantly. In doing so, it could break into the zone around the higher-level 78 Fibonacci retracement between USD 7.03 and USD 6.46. A bullish price reaction is to be planned again. Only if Bitcoin were to continue to correct massively in the direction of USD 13,850 or even USD 12,500 could Avalanche also fall back to the old breakout level of USD 4.97 and below.

Looking at the indicators, there is currently a positive picture, which favors the bullish scenario for the coming weeks. The RSI is currently overbought on a daily basis with a value of 76. In the weekly chart, on the other hand, there is still room for improvement. The positive picture of the indicators is underpinned when looking at the MACD. This was able to generate a fresh buy signal and still has plenty of room in the daily chart for a sustained trend movement to the north.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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