Avalanche (AVAX) is showing signs of an ongoing bounce, painting a classic bullish reversal pattern.

AVAX Price Under $35?

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The pattern, dubbed the “double bottom”, occurs when the price establishes a support level, bounces, corrects after finding a resistance level, pulls back to previous support, and bounces back to a resistance level to pursue a breakout.

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Since May 27, AVAX price trends look the same as those usually seen during the formation of a double bottom. In particular, the AVAX/USD pair bounced twice on the 4-hour chart after testing the same support near $22.25 and is now expected to break above the resistance level, also called the “neck line”, near $27.50.

4-hour AVAX/USD price chart with a double bottom setting. Source: Trading View
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If AVAX breaks decisively above $27.50 and preferably by volume, then the upside target will have a length equal to the maximum distance between the double bottom support levels and the neckline levels.

This will bring the Avalanche token to $35, which is 30% more than today’s price.

Controversial bearish scenario

Avalanche is currently trading nearly 82% below its all-time high of around $151 set in November 2021. During the correction, the AVAX/USD pair formed several consolidation channels, but broke out of them to continue the downtrend, which could spoil the outlines of the bullish scenario. above.

If we move to the daily timeframe, then AVAX has been consolidating inside a similar channel since May 2022, fluctuating between the falling resistance of the trend line and the support of the horizontal trend line. Taken together, these trend lines form a “descending triangle” that traditional analysts consider a continuation pattern.

AVAX/USD daily chart. Source: Trading View

Thus, in the coming days, AVAX risks exiting the descending triangle with a downward shift. Meanwhile, in the “ideal” scenario, the token would fall to the height of the descending triangle, as measured from the breakout point.

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This places the AVAX descending triangle near $13.25, almost 50% below today’s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect those of Cryptooshala.com. Every investment and trading step involves risk, you should do your own research when making a decision.