Avalanche [AVAX] traders should know these trade-winning details
Roughly a week ago we saw Avalanche [AVAX] bounce back from its ascending support which is part of its wedge pattern. We also entertained the possibility of a breakout in case of a strong rally.
Fast forward to the present and AVAX did manage to achieve a healthy breakout above the lateral resistance line. However, its upside has been limited, judging by the subsequent pullback.
AVAX traded at $23.59 at press time after a slight pullback from its weekly high of $26.30.
The slight retracement reflects the overall crypto market conditions but now the big question is whether it will extend its retracement or maintain the upside.
Source: TradingView
AVAX’s breakout is a good sign especially for the bulls because it means that the price has overcome a significant restriction zone. In order to understand its next move, we must understand the reasons for the latest price outcome.
Its current reversal occurred after its Money Flow Index (MFI) entered the distribution zone. An overall increase in selling pressure in the cryptocurrency market last two days has allowed the bulls to cool off after their latest assault. This robbed them of a chance to push a bit higher into overbought territory.
One key observation about the current retracement is that it is limited, suggesting that most AVAX holders have opted to HODL. This might be in anticipation of a deeper bullish recovery after bottoming out in June.
One reason why they might expect more growth is that Avalanche continues to achieve strong network growth.
Source: Santiment
Avalanche’s strong growth is courtesy of the strong development activity that AVAX maintained especially in the last four weeks.
This may have encouraged strong volumes to flow into AVAX and hence the rally, and its
Read more on ambcrypto.com
