Avalanche (AVAX), a smart contract platform known for its fast transaction speeds, is making waves in the cryptocurrency world. As the recent price decline appears to be coming to an end, analysts are eyeing a potential breakout that could take AVAX to new highs. However, amid the bullish whispers, experts are advising investors to take a dose of cautious optimism before jumping on the bandwagon.
Consolidation phase hints at breakout potential
The current price action of AVAX has analysts glued to their charts. The coin is consolidating within a falling wedge, a technical indicator that often precedes a bullish breakout. This consolidation suggests a healthy correction from the previous downtrend, explains the renowned crypto analyst Worlds Of Charts.
$Avax
Consolidation in a falling wedge on the chart, looks like a healthy correction is almost complete. We are preparing for a breakout and preparing for a bullish continuation. Expect a move to $60-65 in case of a successful breakout #Crypto #Avax pic.twitter.com/XafWguyk8w
— World Of Charts (@WorldOfCharts1) July 1, 2024
According to the analyst, the falling wedge is a key signal that AVAX may be winding down for a significant upside move. Worlds Of Charts forecasts a price move towards the $60-$65 range if the breakout materializes.
Supporting this view, CoinCodex, a popular crypto forecasting platform, offers a more aggressive forecast. Their data suggests a stunning 227% increase in AVAX, which would push the price to a high of $91.46 by August 2, 2024.
Network figures show investor confidence
Meanwhile, on-chain data from IntoTheBlock paints a picture of investor confidence. More than half (51%) of AVAX holders are currently in profit, showing a positive long-term outlook.
Further strengthening this confidence is the fact that a full 45% of investors hold their AVAX for more than a year, demonstrating a commitment to the long-term vision of the project.
The dominance of large investors, often referred to as whales, in the AVAX ecosystem is another notable point. These whales own a significant 72% of the circulating supply, which contributes to a sense of stability. Whale activity can significantly impact price movements, and their continued investment in AVAX suggests that they see value in the platform’s potential.
A Call for Moderate Optimism
The recent price drop also serves as a reminder of the inherent volatility of the crypto market. While the falling wedge suggests a potential reversal, a confirmed breakout has yet to be seen. With careful analysis and a well-defined investment strategy,
Avalanche could be poised for a significant rally. However, for now, investors should be cautious and not get carried away by the bullish enthusiasm.
Main image by Pexels, chart by TradingView
