AVAX’s Early Surge in 2023
Avalanche (AVAX) has kicked off 2023 with quite the fireworks display, surging nearly 55% in just a fortnight. Talk about a New Year’s resolution! But before you grab your party hats, let’s dive into what’s brewing beneath the surface and whether this momentum is here to stay.
The Bullish Breakout Explained
The AVAX/USD chart has been strutting its stuff, forming a falling wedge pattern since May 2022. Now, it seems we’ve hit the breakout stage. A falling wedge signals a potential upward move when price trends lower within the confines defined by two converging, descending trend lines. As per technical analysis rules, once AVAX breaks free from this wedge, it could potentially see a price surge all the way to $34—an eye-popping 115% increase from its current standing!
Understanding the Falling Wedge
So, what’s the magic behind this sweet pattern? Here’s how it typically works:
- Price trends lower, but the intensity of downward movement slows.
- It paints a lovely, converging line, gradually tightening like a belt after a holiday feast.
- Eventually, price breaks out above the upper trendline, leading to a bullish scenario.
Partnerships That Pack a Punch
Hold on to your wallets, because Ava Labs—the brains behind Avalanche—has just teamed up with none other than Amazon Web Services (AWS). This partnership is bound to unleash a flurry of features that simplify running Avalanche nodes through the AWS Marketplace. Imagine developers whipping up Avalanche subnets with just a few clicks! It’s like cooking instant ramen but way smarter.
The potential to enhance Avalanche’s utility among businesses and governments is on the table, and this could intensify demand for AVAX tokens. In that 24-hour window following the announcement, AVAX jumped an impressive 30%. If that doesn’t get you hyped, what will?
Macro Economic Winds Shifting
Now, let’s peek at the macroeconomic backdrop. With riskier asset fundamentals improving, the overall crypto market is feeling a nice breeze. A recent Bloomberg survey predicts a dip in the U.S. Consumer Price Index (CPI). Why does this matter? Well, if inflation decreases, the Federal Reserve might just sit back and relax on interest rate hikes, leaving investors flush with cash to invest in riskier assets like cryptos. And guess what? AVAX could ride this wave to even higher altitudes.
What’s on the Inflation Agenda?
The next CPI report is set for January 12, and investors are all ears. If conditions play out according to forecast, expect tantalizing returns not just for AVAX, but across the broader stock market as well.
But Wait, Here Come the Risks!
Before you dive in headfirst, let’s not get ahead of ourselves. AVAX is flirting with a strong resistance level near $15.75, a zone that played hard to get from June to November 2022. If the price can’t decisively break above this resistance, we may be looking at a potential slide down to the support level around $10.50, a 35% drop from current levels!
Watch That Support
This support line is reminiscent of the dramatic ups and downs experienced in the market back in 2021, hinting that price may have a short leash if it doesn’t break through that pesky $15.75 threshold.
Final Thoughts: A Balancing Act
As we stand today, the AVAX journey offers plenty of reasons to be optimistic, from its technical setups to powerhouse partnerships. However, as with any investment, there’s always that nagging risk. So as you consider hopping on the AVAX train, keep a steady head and do your homework. After all, riding the crypto wave can be both exhilarating and terrifying at the same time!
