After a strong price performance over the past month, driven by growing interest in the Avalanche ecosystem, AVAX now faces a key resistance area that could delay its long-awaited rally.
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Institutional Momentum Fuels Avalanche Price
On Wednesday, Avalanche continued its recovery from the start-of-week pullback and is currently retesting the $34 area as support. The cryptocurrency recently fell to the $29 level, but quickly bounced toward a seven-month high of $36.1 on Tuesday, fueled by institutional interest in the ecosystem.
AgriFORCE Growing Systems recently announced its rebrand to a crypto treasury company under the name AVAX One, marking the first Nasdaq-listed entity focused on Avalanche. The company, supported by Hivemind Capital and SkyBridge Capital founder Anthony Scaramucci, aims to raise $550 million to accumulate the cryptocurrency.
Notably, the Avalanche Foundation, the nonprofit behind the project, also revealed it was seeking to raise $1 billion to establish two US-based crypto treasury vehicles. Last week, South Korean crypto custodian BDACS launched KRW1, the country’s first Korean won–pegged stablecoin, on Avalanche.
Previously, Ava Labs secured a strategic partnership with Toyota Blockchain Lab to build a blockchain-based system, the Mobility Open Network (MON), designed to pave the road for new emerging use cases such as robotaxi fleets.
AVAX Monthly Close Holds Rally’s Key
Analyst Rekt Capital noted that the cryptocurrency has had a strong three-month rally within its Macro Wedge pattern but also cautioned that there’s “further work to be done” for a bullish trend continuation.
The cryptocurrency has seen a 43% increase in the monthly timeframe, turning the $30 level into support two weeks ago. Since then, the AVAX price has attempted to reclaim the $35 resistance twice, but failed to sustain the breakout.
Avalanche has been trading inside a Macro wedge pattern since the start of 2024, with the price steadily hovering between the formation’s upper and lower boundaries. The recent rally has sent the price toward the pattern’s resistance zone, with the breakout level sitting around the $38.40 mark.
According to the analysis, AVAX’s next crucial step is to close September above the Macro Downtrend and have a post-breakout retest of this level as support. A monthly close above this area would “open the path toward repeating bullish history similar to mid-2021 and early 2024.”
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Failing to secure a monthly close above the $38.40 area could see Avalanche up for a retest of the $29-$30 support, further risking a drop toward the monthly opening of $23.6. To target the Macro Wedge resistance, the cryptocurrency still must reclaim the $35-$36 zone, where the next major sell wall is located.
Despite the warning, the analyst detailed that a retest of the support region could “extend base-building further into Q4, ultimately enabling a more sustainable breakout attempt later.”
As of this writing, AVAX is trading at $33.75, a 1% decline in the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
