(Filip L. – FXStreet)
– Avalanche price action performs a technical bounce on Monday during its trading session.
– On the back of that bounce, AVAX price rallies higher.
– Backed by the RSI, the bulls have plenty of room to go with not much standing in their way.
Avalanche (AVAX) price is set to jump 10% to 20% on the back of an entry at a simple technical element. On the back of that entry, price action already jumped higher and has printed 17% gains. It could even potentially book 33% if all the stars align. Backed up by the Relative Strength Index (RSI), bulls have plenty of room to push price action higher, with a profit target at either $22.00 or $23.30, bearing 10% to 20% gains from where AVAX price is currently residing.
AVAX bulls preparing for a pop above $22
Avalanche price is already up 2% for the day and 17% overall for the week after bulls used the drop in sentiment to enter on the bounce off a technical pivot level. In this case, bulls entered the test and bounced off the monthly S1. On Tuesday, bulls tried to pump up the price action but were cut short in their attempt as equity markets dropped near the US closing bell. Luckily AVAX price was still able to eke out gains, keeping bulls sticking to their positions and now setting them up for a rally by Friday, that could see AVAX hitting an important level.
AVAX price will likely first hit the $22 marker, a pivotal historical level that intersects with the green ascending trendline that acted as backbone for the summer rally. This level might be a challenge as bulls will want to cash in. Profit-booking will go along with a fade in price action, with the risk of a rejection and price action dropping back to $17.63. Should bulls be able to refrain from taking too much profit, expect to see a breakthrough to $23.30 and the 55-day Simple Moving Average (SMA).
As mentioned in the above paragraph, a rejection against $22 could trigger a big fade or even a pull-back towards the monthly S1 level that triggered the initial jump. Additionally, bears could use that momentum to break the support of the monthly S1 and try to spiral price action towards $14.56. From the point of rejection against $22 towards that $14.56 lower level, that would mean a 33% loss in price value.