After dropping below $30 on January 23, the price of Avalanche (AVAX) has now risen above the level while trading at $36 at press time. According to CoinMarketCap, AVAX was able to rise past the level after a 4.63% increase in the last seven days.
But the cryptocurrency, ranked number 9 in market value had a much better performance last year. In 2023, AVAX became one of the tokens with Decentralized Finance (DeFi) fundamentals that performed well. At one point, the price got close to hitting $50 but was pegged back as market participants decided to book profits.
Meanwhile, the 4-hour chart showed that bulls were making attempts to drive AVAX past $40. In summary, this attempt could be foiled by rejection at $36.75. This was because, on two separate occasions, AVAX’ uptrend had been rejected at this zone.
AVAX Targets $40
The first time it happened was January 30 after which AVAX fell to $32. The second time was on February 2 which led the token price to fall back to $34. This time, the bulls need to breach the resistance.
A successful break of $36.75 might lead AVAX to hit the $40 psychological area. However, if the break is unsuccessful, AVAX’s price might retrace to the $33.83 support level. Furthermore, the Relative Strength Index (RSI) had increased to 61.95. This indicates a good level of buying momentum.
If buying momentum continues to hit high levels, then AVAX might be able to rise past $36.75. From a bullish perspective, the price might hit $40 in the short term, and could also jump past it. In contrast, a decline in the RSI could lead to a drawback below $35.
AVAX/USD 4-Hour Chart (Source: TradingView)
Another indication Coin Edition assessed was the Moving Average Convergence Divergence (MACD). At press time, the MACD was positive, indicating a bullish momentum. Should the reading remain green, AVAX might surpass its yearly high of $43.40.
TVL Remains Stuck
A summary of the technical outlook suggests that AVAX was undervalued and had the potential to perform much better. In terms of the Total Value Locked (TVL), DeFiLlama data showed that Avalanche’s TVL was $818.93 million.
The TVL measures the total amount of digital assets locked in a protocol. When the metric increases, it means participants perceive the protocol to be trustworthy. Hence, they stake assets in it in anticipation of a better yield.
Avalanche TVL (Source: DeFiLlama)
On the other hand, a decreasing TVL suggests otherwise. For Avalanche, the TVL was around the same value it was 30 days back. Therefore, this implies that market players were unsure whether to contribute to the overall health of the chain or not.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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