Avalanche (AVAX) is back in the spotlight as analysts forecast a potential 21% surge in price—on one major condition.
The altcoin, which recently saw a sharp 70% correction, is showing early signs of a bullish reversal, supported by increasing on-chain activity and a breakout from a critical price pattern.
But the big move hinges on AVAX achieving a daily close above a key resistance level: $21.
Whale Activity Spikes 169% — A Bullish Signal?
According to on-chain data from IntoTheBlock, large AVAX transactions—typically involving institutional players or crypto whales—have soared by an impressive 169%. This surge is often interpreted as a strong vote of confidence in the asset’s near-term potential.
At the same time, Avalanche’s trading volume rose by 22% over the last 24 hours, even as the token slipped 2.5% to trade around $20.05. The spike in volume combined with increased large-scale transactions suggests that the market is heating up, and that significant players are positioning themselves ahead of a possible breakout.
AVAX Technical Setup Points to a Reversal
From a technical analysis standpoint, AVAX appears to be entering a bullish phase. On the weekly chart, the asset is rebounding from the lower boundary of a descending channel, marked by a strong bullish engulfing candlestick—a classic reversal pattern.
Meanwhile, the daily chart reveals something even more compelling: AVAX has broken out of a long-standing descending channel and is currently testing the neckline of a bullish cup and handle formation. This pattern often signals the start of a major upward movement, provided the asset can confirm the breakout.
The $21 Level: The Make-or-Break Moment
Right now, all eyes are on the $21 price level. This mark is not just psychological resistance—it also serves as the neckline of the bullish cup and handle pattern. Analysts say a daily candle close above $21 would confirm the breakout, paving the way for a 21% rally to the $25.15 target.
If bullish momentum holds beyond that, AVAX could even see a second leg up, potentially reaching $31.40—an additional 25% upside from the $25 range.
However, failure to breach and hold above the $21 level could invalidate the current bullish setup. Without confirmation, AVAX risks falling back into consolidation or even retesting lower support levels.
Mixed Signals from Technical Indicators
While the chart patterns and volume metrics suggest a bullish narrative, some technical indicators are giving off more neutral signals. AVAX is still trading below its 200-day Exponential Moving Average (EMA), indicating that the long-term trend remains bearish—at least for now.
On the other hand, the Relative Strength Index (RSI) is currently at 56. This reading shows that the asset has cleared the neutral 50 zone, but is still far from overbought territory, suggesting room for further upside if momentum continues.
What’s Next for AVAX?
To recap, AVAX is showing clear signs of recovery and a potential breakout. With whale activity surging, bullish patterns forming on multiple timeframes, and growing investor interest, the setup looks promising.
But the key takeaway is this: A daily close above $21 is critical. Without that confirmation, the bullish thesis could unravel, and traders may find themselves caught in another false breakout.
For now, AVAX holders and prospective buyers should monitor the price action closely. If the token does close above $21, it could trigger a new wave of bullish momentum—and make the 21% upside projection a near-term reality.
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