Avalanche forms an ascending channel – Which levels should you watch?
Avalanche trades in an uptrend channel in strong bullish momentum
Growth in NFTs and DeFi is behind the positive sentiment
Watch for a potential buy entry on retracement
Avalanche’s AVAX/USD is leading gains among the top 20 largest cryptocurrencies. The token, which powers the layer-1 blockchain, is up 2.47% and 17.44% in daily and weekly data. AVAX is currently changing hands for around $29. The network expansion in NFTs and DeFi is behind the bullish momentum.
According to TVL aggregator DefiLlama, Avalanche’s top lending protocols are looking up. Among them is Benqi, which has gained 15% value in the past week. Avalanche, a proof-of-stake smart contract platform, is also making strides in NFTs.
Its NFT sales volumes in the past day are up 2.32% at $30,598, according to CryptoSlam. Native digital assets like Avapepes NFT and Pizza Game Chef Tools registered significant gains in the past week.
While the enthusiasm around NFTs has shown a cool-off, Avalanche is benefiting more in the space. The technical outlook in the 4-hour chart below complements AVAX’s strong bullish momentum.
AVAX/USD forms an ascending channel in 4-hour chart
Source: TradingView
From the 4-hour technical chart above, AVAX is trading on a clear trend of higher highs and higher lows. The token is trading near the top of the uptrend channel amid a strong bullish momentum. The 20-day and 50-day moving averages are both holding as support.
Nonetheless, AVAX could be preparing for a near-term retracement. With an RSI reading of 69, the token is approaching the overbought zone. In the case of retracement, $27 becomes the immediate fallback. The token can also retrace to $25 or $22 before any pullback.
Concluding thoughts
Avalanche has positioned itself as a strong smart contracts platform. It is attracting NFT, and DeFi projects with huge potential as a result. The on-chain activity is giving AVAX token a strong bullish momentum. The token is poised to continue moving on the uptrend. Investors should watch $27, $25, and $22 as possible entry points.
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