Avalanche (AVAX) price analysis 17 Feb: Is rally past $100 on?
Avalanche may extend its recovery in the next few days
Avalanche’s AVAX token has been one of the stronger altcoins during the recent recovery in the crypto sector, indicating that traders may have used the dips to accumulate at lower levels.
Investors are closely watching the impact of various cryptocurrencies on the environment. In that regard, the Crypto Carbon Ratings Institute (CCRI) released a report titled “Energy Efficiency and Carbon Footprint of PoS Blockchain Protocols”, where it analysed several proof-of-stake-based blockchain protocols for their energy consumption.
The report found the energy consumption of Bitcoin is equivalent to that of 8.5 million US households in a given year. Ethereum is a little better but it also uses energy similar to that of 1.6 million US households. In comparison, the Avalanche network is much more energy-efficient: it uses the same energy as just 46 US households. The most energy-efficient network was Polkadot which consumed energy equal to that of 6.6 US households.
A short-term positive for AVAX was the announcement that eToro would offer support to the token from 15 February. This move has made AVAX accessible to several new investors.
Could AVAX go up further after the recent recovery or will it succumb to profit-booking? Read the AVAX price analysis to find out what the charts suggest.
Avalanche technical analysis: weekly chart
AVAX’s price has risen sharply from just below the 50% Fibonacci retracement level at $69.58 and has reached the downtrend line. During a corrective phase, traders tend to sell on rallies to strong resistance levels.
Therefore, the bears are likely to defend the downtrend line aggressively. If the price turns down from the current level, the first support is at $86.35. If the price rebounds off this level, it will suggest that bulls are not giving up much ground.
The buyers will then again attempt to push the price above the downtrend line. If they succeed, the AVAX/USD pair could rally to the overhead resistance at $115.02. The relative strength index (RSI) in the positive territory indicates that bulls have a slight advantage.
What is your sentiment on AVAX/USD?
On the other hand, if the bears pull the price below $86.35, the pair could slide to $77.91. A break below this level will signal that bears are back in the driver’s seat.
Avalanche technical analysis: daily chart
AVAX’s price has been gradually rising toward the resistance line of the descending channel. The bears are likely to mount a strong defence in the zone between $95.94 and the resistance line of the channel.
If the price turns down from this level, the pair could drop to the uptrend line. This line has acted as a strong support during previous pullbacks, hence the bulls may buy on dips to this level.
If the pair rebounds off the uptrend line, the bulls will again attempt to clear the overhead zone. If they manage to do that, the pair could indicate that the correction may be over.
Conversely, if bears sink the price below the uptrend line, the selling could intensify as short-term traders who bought at lower levels may book profits. A break and close below $77 could result in a decline to $67.
Avalanche: Buy or sell at current levels?
Avalanche’s price analysis has reached an important resistance zone where the bulls and the bears are likely to battle for supremacy. A break and close above the descending channel will suggest that bulls are in command. That could start a rally to $115.02. The bears will gain the upper hand on a break and close below the uptrend line.
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.
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