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Home CRYPTO

Avalanche at a Crossroads: Breakdown or Recovery Ahead?

by Matoy
March 6, 2025
in CRYPTO, FINANCE, INVESTING, OPINION
Reading Time: 3 mins read
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  • AVAX hovers near a major support level, testing its recent lows
  • Fibonacci retracement levels indicate possible reversal zones
  • Momentum indicators suggest a crucial turning point for short-term price action

AVAX has been in a prolonged downtrend after failing to sustain its previous highs near $55. Since then, lower highs and lower lows have defined its movement, showing clear signs of weakness in buying momentum. The price has recently tested the $21 support zone, a level that previously acted as a launchpad for a strong rally in November.

This area is critical because a failure to hold above it could send Avalanche tumbling toward the next key support near $19 or even lower. On the flip side, if bulls step in aggressively, we might see a rebound attempt—but they’ll need to break through the $25-$27 resistance zone for any real shift in momentum.

$AVAX#crypto pic.twitter.com/GaPjnAPTQw

— CryptOpus (@ImCryptOpus) March 6, 2025

Key Fibonacci Levels Could Decide AVAX’s Next Move

Looking at the TradingView data from the recent peak to the latest low, AVAX is approaching a significant inflection point. The 0.618 retracement sits just above current price action, meaning a successful reclaim could trigger a stronger recovery. However, if the price continues to reject this zone, it would confirm bearish dominance, putting further downside into play.

Another indicator worth noting is the RSI, which has been hovering in oversold territory. This suggests that selling pressure might be overextended, creating an opportunity for a short-term bounce. That being said, without clear confirmation of strength, any upward move could simply be a relief rally rather than a full reversal.

TradingView

What’s Next?

For now, AVAX traders should keep an eye on the $21-$22 range. If price manages to hold this zone and push higher, we could see a move back toward $25-$27 in the near term. A strong close above these levels would signal a potential trend reversal, possibly bringing back bullish momentum.

However, a breakdown below $21 would be a red flag, likely leading to more downside toward $19 or lower. Given the current technical setup, the next few trading sessions will be crucial in determining whether AVAX can recover or if more pain is ahead.

Avalanche was created to provide a highly scalable blockchain solution, aiming to rival Ethereum with faster transaction speeds and lower costs. Its unique consensus mechanism allows for high throughput, making it an attractive option for developers. But in the short term, all eyes are on whether $AVAX can regain its footing and avoid another leg down.

Tags: AvalancheAVAX
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