Avalanche (AVAX) shows signs of continuing its ongoing rebound move as it paints a classic bullish reversal pattern.
AVAX price to $35?
Dubbed as “double bottom,” the pattern appears when the price establishes a support level, rebounds, corrects after finding a resistance level, pulls back toward the previous support, and bounces back toward the resistance level to pursue a breakout.
Since May 27, AVAX’s price trends appear like those typically witnessed during the double bottom formation. Specifically, the AVAX/USD pair on the 4-hour chart has bounced twice after testing the same support level near $22.25, and now eyes a breakout above its resistance level – also called “neckline” – near $27.50.
AVAX/USD four-hour price chart with “double bottom'”setup. Source: TradingView
If AVAX breaks above $27.50 decisively, and preferably in trading volumes, then the upside target would be at length equal to the maximum distance between the double bottom’s support and neckline levels.
That would put the Avalanche token en route toward $35, up 30% from today’s price.
Conflicting bearish scenario
Avalanche currently trades almost 82% below its record peak of around $151, established in November 2021. During its correction, the AVAX/USD pair formed multiple consolidation channels but broke out of them to extend its downtrend further, which could spoil the bullish scenario outlines above.Â
Zooming out to the daily timeframe, and AVAX has been consolidating inside a similar channel since May 2022, fluctuating between falling trendline resistance and horizontal trendline support. When placed together, these trendlines form a “descending triangle,” which traditional analysts consider a continuation pattern.
AVAX/USD daily price chart. Source: TradingView
Therefore, AVAX risks breaking out of the descending triangle in the coming days, with its bias skewed to the downside. Meanwhile, in a “perfect” scenario, the token will fall by as much as the descending triangle’s height, when measured from the breakout point.
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That puts AVAX’s descending triangle near $13.25, almost 50% below today’s price.
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