The broader cryptocurrency market is experiencing sustained selling pressure, with Ethereum (ETH) seeing a decline of over 17% in the last 30 days. This downturn has exerted significant downward pressure on major altcoins, including Avalanche (AVAX).
AVAX has experienced a price drop of nearly 22% over the past month. However, underlying this weakness, technical analysis of the chart reveals a more constructive development: a clean and well-defined harmonic structure that suggests a potential rebound may be imminent.
Harmonic Pattern Suggests Potential Upside Movement
On the 4-hour timeframe, AVAX is forming a Bearish Cypher harmonic pattern. This particular pattern is recognized for its tendency to drive prices higher during the CD-leg before reaching its Potential Reversal Zone (PRZ).
The formation of this structure began at Point X, which was observed near $21.09. This was followed by a sharp correction down to Point A, a subsequent recovery bounce towards Point B, and then a deeper decline into Point C, approximately at $14.62. Since reaching this C-point, AVAX has begun to exhibit early signs of recovery, with recent trading activity near $15.65 as buyers gradually re-enter the market.
The chart also highlights a critical technical factor supporting this developing upward trend: the 100-hour moving average, which is currently positioned around $16.94. This dynamic level is now acting as the next significant resistance point and will play a crucial role in determining whether AVAX can accumulate sufficient momentum to continue its ascent.
Future Outlook for AVAX
The most critical level for AVAX in the short term remains the C-support zone, situated near $14.62. Maintaining support above this level is essential for the validity of the harmonic pattern and preserves the bullish projection for an upward movement.
Should AVAX hold this support and proceed higher, the next major obstacle will be reclaiming the 100-hour moving average. A decisive breakout above $16.94 would serve as a confirmation of renewed buyer confidence and is likely to accelerate the CD-leg towards the upper harmonic targets.
Based on the structure of the Cypher pattern, AVAX is projected to move towards the Potential Reversal Zone (PRZ). This zone is defined by the 0.786 Fibonacci extension at $19.79 and the 1.0 extension at $21.09. This region signifies the completion area of the pattern, where the price may experience a slowdown or encounter stronger resistance.
Conversely, if AVAX fails to hold the $14.62 support level, the structure will be significantly weakened. This scenario would open the possibility of further downward movement before any substantial trend recovery can occur.