Avalanche price can double by summer as AVAX’s 20% weekly rally rekindles ‘bull flag’

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The sharp rise in the avalanche market (AVAX) this week increased the chances of a further 100% rise in the second quarter.

Landslide diagram plotter “Thor flag”
The positive outlook comes mainly from the multi-month bullish AVAX flag set, which was formed after a sharp price rise above $ 150, the highest record in the avalanche market. In detail, the setup is a bearish channel characterized by two parallel trend lines against the previous trend, with reduced volumes highlighting the weakness in the downtrend.

AVAX / USD price weekly chart in a bull flag pattern. Source: Trading View
In an ideal scenario, the bullish flag is resolved by an eruption over the upper trend lines followed by an extended uptrend, with a profit measure equal to the size of the previous uptrend to the underlying asset (also called the flagpole).

This could lead to a similar bullish movement in the AVAX price in the coming weeks, starting with a closing over the temporary resistance to the 20-week EMA (20-week EMA; green wave in the chart above) and then the eruption. Above the upper trend line of the flag.

As a result, AVAX may appear to rise to $ 157, more than 100% from the current price of $ 77.

AVAX PRICE RISK
The recent increase in purchases in the avalanche market is largely due to the strong positive correlation with Bitcoin (BTC).

It is noteworthy that at the beginning of 2022, AVAX and BTC moved almost perfectly, with a correlation coefficient between 0.90 and 0.99. As of March 17, however, the value has corrected to around 0.79, which still highlights Avalanche’s commitment to reverse the crypto’s benchmark movements.

AVAX / USD and BTC / USD daily price chart with correlation coefficient. Source: Trading View
However, the correlation exposed AVAX to the same downside risks that Bitcoin has faced since November 2021, including quantitative easing by the Federal Reserve and the ongoing Ukraine-Russia conflict.

On March 16, Federal Reserve Chairman Jerome Powell said the US economy is strong enough to handle high interest rates and announced the first rate hike from the central bank since 2018.

Meanwhile, Joel Krueger, strategist at the crypto exchange LMAX Digital, indicated that the central bank’s hawkish tone could send Bitcoin away from its all-time high of $ 69,000.

Higher prices will stifle stock markets. So if we see a mass exodus of risky assets, it will be reflected in everything, “he told Bloomberg, stressing that bitcoin could fall to $ 20,000, which will contribute to a” decline in cryptocurrencies. ”

Related topics: Avalanche seeks to accelerate subnet adoption with multiverse stimulus programs

As a result, AVAX’s bullish forecast may be invalid if it matches the bitcoin price exactly. This may point to a possible price reversal from the mid-resistance near $ 80, coinciding with the 0.618 Fibonacci retracement line drawn from the $ 9 swing low to the $ 152 swing high.

Source: CoinTelegraph

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