Avalanche (AVAX) has recently offered a glimmer of hope amidst a prolonged bearish period, with new activity sparking optimism for a potential recovery. However, this surge comes at a crucial juncture, testing formidable long-term resistance levels that have historically thwarted previous attempts at a trend reversal.
Short-Term Momentum Builds
Recent data reveals a notable resurgence in AVAX, as its trading volume climbed by 25 percent to $248.87 million, pushing its price to approximately $9.25. This move has seen AVAX press against a significant descending trendline that originated from a sharp crash on October 10th. Technical indicators reflect this burgeoning momentum, with a bullish MACD crossover appearing on the daily chart, and the histogram turning slightly positive. While the Relative Strength Index (RSI) has recovered from recent lows, reaching 42, it remains below the 50-mark, suggesting that while momentum is improving, it hasn't yet fully cemented a bullish reversal. Adding to the complexity, aggressive buying activity has been observed across both spot and leveraged markets, indicated by elevated Spot and Futures Taker Buy Dominance. This points to active demand and potential accumulation happening below the surface. Yet, despite this strong buyer aggression, AVAX has struggled to decisively reclaim the descending resistance, highlighting a paradox where significant demand has not yet translated into a structural shift in price action.
The Enduring Macro Bearish Trend
Despite these promising short-term improvements, Avalanche remains ensnared in a formidable multi-year downtrend that has persisted since 2021. This macro resistance has served as an insurmountable ceiling for every major rally over the past few years, firmly keeping AVAX in a protracted bear market. Weekly technical indicators further underscore this bearish outlook; the Weekly RSI hovers near 31.78, staying below its moving average, and the Weekly MACD remains in negative territory with a slightly negative histogram. Until AVAX achieves a confirmed weekly close above this critical multi-year downtrend, the broader market structure for Avalanche will likely remain bearish, with short-term gains serving as mere participation rather than definitive confirmation of a sustained trend reversal.
