Highlights:
- Avalanche gaining upside momentum after finding strong support at $19.44
- Avalanche bullish reversal to be confirmed if $32.63 resistance is broken
- A breach of this resistance could see AVAX rally to $50 or higher
After a prolonged downtrend, Avalanche found a solid support level at $19.44 on August 5, 2024. Since then, the cryptocurrency has shown signs of recovery, with bulls gradually taking control of the market, albeit on low trading volumes. As of today, Avalanche has gained 1.92%, trading at $23.50 and showing signs of further upward momentum. While this is a positive development, Avalanche still has hurdles before it enters a fully-fledged bull run.
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Technical Analysis – AVAX Trending Towards Critical Resistance
To confirm a clear bull run, Avalanche must push through the significant resistance level at $32.63. Breaking through this resistance is crucial for the cryptocurrency to establish a new upward trajectory and potentially reach new highs. The path to this breakout is influenced by several factors, most notably the performance of Bitcoin, the market’s leading cryptocurrency.
Bitcoin has been sending bullish signals recently, and if it manages to rally to $70,000 in the short term, it could trigger a widespread rally across the entire cryptocurrency market. This would benefit top altcoins like Avalanche, providing the necessary momentum to break through the $32.63 resistance.
Strengthening Fundamentals
Despite its recent struggles, Avalanche’s underlying fundamentals have improved, further supporting the case for a potential rally.
Enhancing L-1 Capabilities
One of the key developments is the recent publication of “Research Unlock: Unlocking Avalanche Layer 1s with ACP-77” on August 21, 2024. This research highlights Avalanche’s commitment to enhancing its Layer 1 blockchain capabilities, a critical aspect of its long-term growth and adoption.
ACP-77 redesigns the relationship between validators and Avalanche L1s 🤝
✅ Makes regulatory compliance easy to implement for enterprise L1s
✅ Retail-focused L1s can benefit from a more decentralized validator set
New ACP-77 research from @TheBlock__https://t.co/rRPT6rpi8S
— Avalanche 🔺 (@avax) August 21, 2024
Strategic Partnerships
Additionally, Avalanche has proactively forged strategic partnerships that could drive its adoption and utility. The cryptocurrency recently announced a partnership with Elixir Games, aimed at seamlessly integrating the $KIDEN token into its ecosystem. This collaboration is expected to enhance the gaming experience on the Avalanche network and attract more users to its platform.
Moreover, Avalanche has partnered with Agora to expand its reach and provide a neutral and open digital dollar solution. This partnership is particularly significant as it aligns with the growing demand for stablecoins and digital currencies, positioning Avalanche as a critical player in this emerging market.
This just in. Agora is expanding to Avalanche 🔺
Born from the belief that money should be neutral, @withAUSD brings an open stablecoin model that incentivizes businesses to contribute to and service the network, allowing them to share in the economic benefits of its growth and… pic.twitter.com/XIjBb6k3Hs
— Avalanche 🔺 (@avax) August 20, 2024
Avalanche DEX
Avalanche will launch a new decentralized exchange (DEX) called DEX 223. This exchange will support fully decentralized listings on multiple blockchains, offering users more flexibility and security in their trading activities. Introducing DEX 223 will likely increase transaction volumes on the Avalanche network, contributing to its overall growth.
NFT Platforms Launching on Avalanche
Even bigger news is that the JuJu Exchange, a platform dedicated to trading and buying NFTs, has launched on Avalanche. The growing popularity of NFTs presents a lucrative opportunity for Avalanche as it seeks to tap into this rapidly expanding market. The JuJu Exchange is expected to attract artists, collectors, and investors, further boosting the network’s adoption and utility.
The Role of Bitcoin in Avalanche’s Price Movement
While these developments paint a positive picture for Avalanche, it’s important to note that its price is still heavily influenced by Bitcoin. Bitcoin’s performance often dictates the broader market sentiment, and any significant moves in Bitcoin’s price are likely to impact Avalanche.
For instance, if Bitcoin were to drop below $58,000 again, Avalanche could face renewed selling pressure, potentially leading to a decline in its price. In such a scenario, a loss of the $19.44 support level could result in Avalanche dropping below $10 in the short term.
Outlook for Avalanche
Overall, the current market sentiment leans more towards optimism, with Bitcoin showing increasing bullish momentum. This, coupled with Avalanche’s strengthening fundamentals and expanding ecosystem, suggests that the odds favor a rally. If it successfully breaks through the $32.63 resistance level, AVAX could rally above $50 in the short term.
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