- AVAX price broke above $40, reflecting a rise after validating a long-term horizontal support zone.
- A rejection in the $40 area and breakout of the channel could lead AVAX to fall towards support at $33.
Avalanche (AVAX) price has broken above $40 on Feb. 10, following a rally over the past 20 trading days. This advance has led the price to bounce off a long-term horizontal support zone, while still trading within a shorter-term resistance level.
Weekly technical analysis shows that the price of AVAX has moved higher since January 22, validating a horizontal area as support. This area had acted as resistance since May 2022. Despite the advance, the price has not broken above the 2023 high.
The weekly Relative Strength Index (RSI) shows mixed readings. Traders use the RSI to identify overbought or oversold conditions. Although the indicator is above 50, it has declined over the past two months, as well as crossing below overbought territory without recovering.
On the daily time frame, the future direction of AVAX is not confirmed due to mixed price action. The advance since January 22 has occurred within an ascending parallel channel, which generally encloses corrective moves.
On February 10, the channel resistance line rejected AVAX price at the $40 level. However, the daily RSI shows a bullish reading, moving above 50 and showing an uptrend.
It has been suggested that the price of AVAX will follow SOL in case the latter experiences a rise. If $SOL goes up, $AVAX will follow. Muscle memory, ImmortalCrypto expressed in a tweet.
Reaction to the $40 area is key to determining the future direction of AVAX. A successful breakout could lead to a 23% rise toward the 2023 high at $50. Conversely, a rejection in this area and channel breakout could result in a 16% drop toward the nearest support at $33.
At press time AVAX is trading $41
