Avalanche (AVAX), the native cryptocurrency of the Avalanche network, has had a month of stark contrasts. After an initial surge that took the price over $65, marking a significant milestone since May 2022, AVAX experienced a retreat in value, falling to $52.37, a decrease of 3.05% in the last 24 hours. The recent decline is evident in the 4-hour chart, where AVAX faced resistance after peaking at an intra-day high of $54.25.

AVAX weekly price chart:CoinMarketCap

Presently, Avalanche’s price hovers below both the 50-day and 200-day Simple Moving Averages (SMAs), a bearish indicator for market sentiment. The short-term price action suggests exhaustion as AVAX struggles within the $51 to $56 resistance zone. A potential correction could be imminent, aligning with Bitcoin’s recent slowdown and sell signs.

If AVAX dips into the immediate accumulation zone, identified between $45 to $50, a rebound is anticipated, with sufficient buying pressure to break through the current resistance. However, should AVAX decline beyond this level, it could test the weekly support at $40. A drop below this support could trigger a further decrease to the $28 level, marking a significant bearish shift.

AVAX Struggles Below Key Levels,Trading in a Narrow Range

In recent trading sessions, AVAX has encountered a challenging market environment, as observed in the 4-hour chart.AVAX has been hovering near $51.0 mark,from the previous opening priced at $53.88,navigating a narrow price range. 

The token has recently experienced a slight dip, coming down from a high of $54.35. This price action has taken place below both the Bollinger Band (BB) 20 SMA middle line and the 100-period moving average, marked at $49.58 and $51.53 respectively, suggesting a bearish sentiment in the market.

The Stochastic RSI, a momentum oscillator, is indicating an oversold condition with a reading below 20, which sometimes precedes a potential price increase if buyers step in. However, the downward slope of the Bollinger Bands indicates a lack of strong bullish momentum. It’s important to monitor if the Stochastic RSI begins to climb, as it may signal an upcoming price reversal.

Looking forward, AVAX faces immediate resistance at the recent high of $53.92, with further upside hurdles near the top Bollinger Band at $53.43. If AVAX can break through these levels, it may attempt to challenge higher resistance near $57.50, marked by the upper boundary of the descending channel. On the downside, the lower Bollinger Band at $48.09 provides immediate support. A break below this could lead to further declines towards the lower channel line, around $45.

AVAX’s Market Correction: Setback or Setup for a Surge?

AVAX has caught the attention of investors after a month of notable highs and subsequent decline, sparking discussions on its market trajectory. Notably, Rekt Capital, a well-known crypto analyst, has shared an optimistic view, interpreting the recent dip as a ‘healthy’ correction. Despite the 18% pullback from its peak above $65, the analyst suggests this could lay the groundwork for a return to the $65-$70 price zone. At present, AVAX hovers around $52.50, showcasing steadiness in the short term amidst market fluctuations.

The market’s sentiment, as echoed by Rekt Capital, suggests that AVAX can find robust support within the $44-$49 range, echoing its December 2023 highs. A foothold here could signal the start of an upward trajectory. Conversely, a sustained bearish pressure might see the token descend towards the $32.66 level, as per the analyst’s forecasts. 

This potential downturn, however, is contrasted by AVAX’s impressive half-year performance, with a whopping 471% gain, and its recent strategic collaborations hinting at increased adoption and positive market impact.