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Avalanche (AVAX) has recently broken free from months of bearish control, signaling a potential bullish reversal that could mark a significant change in its macro price structure. This development is drawing attention from investors and traders in the cryptocurrency space.

AVAX Breakout: A Shift in Momentum

After months of being constrained by a descending dynamic support/resistance level, which has suppressed price action since February, AVAX has successfully broken through this key level. This breakout comes after a confirmed swing failure pattern at the lows—a commonly recognized reversal signal in technical analysis. Following this, price action has reclaimed both the value area high and the point of control from the previous range, suggesting strong buyer activity and a potential trend reversal.

Key Highlights:

  • AVAX flips dynamic support/resistance (SR) level into support, indicating a shift toward a bullish structure.
  • Reclaim of value area high and point of control further reinforces upward momentum.
  • The next critical move depends on confirming a higher low above the flipped SR zone.

Analyzing the Breakout

The breakout above the descending resistance level is significant for several reasons. Not only does it breach a multi-month trendline, but it also occurred following a failed breakdown and a successful reclaim of key range levels. These are clear indications of strong buyer presence and growing confidence in the market.

Currently, price action is forming a higher high. The next crucial step for AVAX is to hold above the flipped resistance zone and establish a higher low. This would solidify the bullish structure and pave the way for further upward movement.

Volume Profile Supports Bullish Sentiment

Volume profile readings align with the bullish outlook. During the breakout, there was an increase in trading volume, indicating that this move is not just a short squeeze but potentially the beginning of a sustainable uptrend. If buyers can maintain this momentum, AVAX could see continued gains.

Potential Price Targets and Risks

If AVAX successfully forms a higher low above the flipped SR resistance, traders can expect a rotation toward the key swing high around $28.70. This level has historically acted as resistance during previous market cycles and could be a significant target for the current uptrend.

However, failure to maintain the current breakout zone could lead to a false breakout scenario. If this happens, AVAX may rotate back into its prior range, negating the bullish structure. As such, monitoring price action closely in the coming days will be crucial.

Tips for Traders:

  • Watch for confirmation of a higher low above the flipped resistance zone to validate the bullish structure.
  • Pay attention to trading volume—sustained high volume supports the case for a continued uptrend.
  • Set stop-loss orders strategically to manage risk in case of a false breakout.

What’s Next for AVAX?

The current market context, with reclaimed range levels and impulsive momentum, supports the bullish thesis for AVAX. If the flipped SR resistance holds and a higher low is confirmed, a continuation move toward the $28.70 region is likely. However, traders should remain vigilant and stay updated with market movements to adapt their strategies as needed.

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