Avalanche (AVAX) recently bounced back from its ascending support, which is incorporated into its wedge pattern.
Today, AVAX has successfully achieved a healthy breakout over the lateral resistance line. However, based on the subsequent downturn, its upside has been constrained.
At the time of writing, AVAX was trading at £19.7 after a little decline from its weekly high of £22.
While the modest retracement reflects the general state of the crypto market, the key question right now is whether it will continue to rise or extend its retracement.
The breakout of AVAX is encouraging news for bulls in particular because it signals that the price has a major obstacle under control.
After the MFI hit the distribution zone, the current reversal occurred. The last two days have seen a general uptick in selling pressure in the crypto market, which has allowed the bulls to calm down following their most recent run. Thus, they were denied the opportunity to advance slightly higher into overbought territory.
The fact that the present retracement is modest is notable, as it indicates that the majority of AVAX holders have decided to HODL. They might be anticipating a bigger recovery post June’s bottom out.
They might anticipate further rise in part because the network continues to experience rapid growth.
The robust development activity, particularly over the past four weeks, is to thank for Avalanche’s remarkable growth.
The surge and AVAX’s ability to maintain strong price action despite a pullback may have been aided by this, as it may have encouraged big volumes to pour into the asset.
Avalanche has had a successful month so far in July. If the volume of NFT trades is used to measure network activity, its performance in June met expectations.
The volume of NFT trades on Avalanche has increased dramatically during the past two weeks.
This may have significantly influenced the demand for AVAX.
The fact that there hasn’t been a fervent sell-off indicates that the bullish sentiment is still strong.
The price action of AVAX is also supported by great utility and growth, thus the future is promising. However, short-term challenges that could prevent a swift market recovery should still be kept in mind.