Avalanche’s (AVAX) price is facing significant resistance that could potentially invalidate the potential of a rally and push the altcoin back into consolidation.
AVAX holders could change the outcome, but they, too, would need incentives that the crypto asset may not be able to offer.
Avalanche’s Bullishness May Be Short-Lived
Avalanche’s price at $37 had broken out of the month-long consolidation it was in, reigniting investors’ optimism about gains. But AVAX fell back below the resistance of $39, essentially reinitiating consolidation.
One reason behind this is the lack of push from the broader market, as evidenced by the Moving Average Convergence Divergence (MACD). MACD is a momentum indicator that shows the relationship between two moving averages of a security’s price, providing buy and sell signals.
For the last couple of days, the MACD has maintained a bullish crossover, but this could change soon. At the moment, the signal line is close to moving above the MACD line, and when that happens, a bearish crossover will be confirmed.
Avalanche MACD. Source: TradingView
This could disrupt the potential rally.
In addition, Avalanche’s price is facing major resistance between $37 and $41. This is because, according to the Global In/Out of the Money (GIOM) indicator, AVAX holders bought about 11.9 million AVAX worth $409.7 million in this range.
To break out of the consolidation, the altcoin would first need to make this supply profitable. This could sustain investors’ bullishness as well. They would be incentivized to participate on the network and push the price further up.
Read More: How To Buy Avalanche (AVAX) and Everything You Need To Know
Avalanche GIOM. Source: IntoTheBlock
However, the chances of this supply becoming profit-bearing are unlikely since the bullish cues are weak currently.
AVAX Price Prediction: Two Limits to Watch
Avalanche’s price, trading at $37, could gradually fall to support at $31 since the aforementioned factors suggest a bearish outcome. The resistance at $39 and support at $31 are the two limits of consolidation that AVAX has been in for more than a month.
Read More: Avalanche (AVAX) Price Prediction 2024/2025/2030
Avalanche Price Analysis. Source: TradingView
But if the market observes bullish cues, Avalanche’s price would have a shot at reclaiming $39 as a support floor. Doing so would initiate a recovery for AVAX, sending it to $42.
The next major resistance is 45. If the altcoin reaches it, the bearish thesis can be considered invalidated.
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