Avalanche (AVAX) Flashes Bullish Signal – Is $56 the Next Stop?

Avalanche (AVAX) appears poised for potential upward movement, with several technical markers attracting interest.

Crypto analyst Carl Moon, known for his vast following on X, has recently highlighted a falling wedge pattern in the daily price chart of Avalanche (AVAX). This formation typically signals a potential reversal, and Moon anticipates a rally toward $56 once the breakout occurs.

According to Moon, this falling wedge pattern could indicate a bullish breakout in AVAX. A close examination of his tweet reveals that AVAX has previously formed a similar structure, leading to a strong rally upon breakout. The current price action mirrors that historical setup, increasing the probability of another surge.

This wedge pattern showcases diminishing selling pressure, as AVAX makes lower highs and lower lows while being compressed within the formation. If the asset breaks above the upper trendline with strong volume, it could confirm Moon's $56 price target.

Before reaching the projected price target, AVAX faces multiple resistance levels. The first key level to break is around $45, followed by $50. A successful move past these thresholds would bolster bullish momentum, with $59.48 emerging as a major resistance zone.

On the downside, AVAX's lower boundary of the falling wedge, near $32, acts as a strong support level. A failure to maintain this range could open the door for a decline toward $28 or lower. Traders are monitoring these levels closely to confirm the asset's next move.

According to CoinGecko, AVAX has fallen by 0.83% in the last 24 hours, while also decreasing by 2.60% over the past seven days. Despite this temporary decline, the trend appears to be shifting.

Volume is a crucial factor in confirming a breakout. An increase in trading activity alongside a daily close above the wedge could strengthen the bullish outlook. Considering AVAX's prior impulsive rallies, an upward move would align with the broader price trend.

As AVAX approaches a crucial breakout point, traders are watching for confirmation signals. If buying pressure increases, the asset could see a sharp rally toward $56, indicating a potential 59% gain from current levels.

However, a rejection at resistance could push the price lower, with $32 serving as a critical support zone. For now, all eyes are on AVAX's price action, as a decisive move could set the stage for the next significant rally.