Avalanche (AVAX) is approaching a pivotal moment in its price trajectory, showing strong signs of a potential bullish breakout from a well-defined descending triangle pattern. As the cryptocurrency consolidates near critical support levels, technical indicators and wave structures suggest that a decisive move—either upward or downward—could be imminent. This analysis dives deep into AVAX’s current price action, Elliott Wave structure, key Fibonacci levels, and what traders should watch in the coming days.
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Understanding the Descending Triangle Formation
On the daily chart, AVAX has been trading within a descending triangle, a classic continuation pattern often preceding a breakout in the direction of the prior trend. In this case, the formation follows a strong impulsive rally that peaked near $65, followed by a corrective ABC decline.
The lower boundary of this pattern aligns with a descending wedge, which typically signals accumulation before a breakout. Price has found consistent support around $33–$34, coinciding with the 0.382 Fibonacci retracement level of the prior uptrend. This confluence of technical support increases the likelihood of a reversal or continuation move to the upside.
A breakout above the upper resistance of the triangle—currently near $41.68 (0.5 Fibonacci level)—would confirm bullish momentum and likely trigger the start of Wave (5) in the Elliott Wave sequence.
Elliott Wave Structure: Is Wave (4) Complete?
The broader Elliott Wave interpretation suggests that AVAX completed a full five-wave impulse to the upside, peaking at approximately $65. This was followed by a corrective three-wave structure (A-B-C), which appears to have concluded near the **$33** zone.
This sets up the possibility that Wave (4) of a larger-degree impulse is now complete, positioning AVAX for Wave (5)—the final leg of the bullish cycle.
Here’s how the potential five-wave impulsive structure from the January 27 low could unfold:
- Wave (i): A decisive break above $36–$37 would confirm the start of the first upward leg.
- Wave (ii): A shallow pullback expected to find support near prior resistance (now support), likely holding above $34.
- Wave (iii): The strongest and most extended leg, potentially driving price toward $42–$44, where early resistance lies.
- Wave (iv): A minor correction expected to hold above $40, preserving bullish structure.
- Wave (v): The final push targeting $53–$55, aligning with the 0.786 Fibonacci retracement level of the entire correction.
If momentum remains strong, a move beyond $55 could retest the previous high near **$65**, completing the full bullish cycle.
Fibonacci Levels: Mapping Key Price Targets
Fibonacci retracement levels play a crucial role in identifying potential resistance and profit-taking zones in AVAX’s recovery.
- $36.10 (0.382 retracement): Immediate resistance. A close above confirms short-term bullish momentum.
- $41.68 (0.5 retracement): Mid-level resistance and breakout confirmation zone.
- $47.24 (0.618 retracement): Major resistance level; likely to see increased selling pressure.
- $53.23–$55.15: Primary target for Wave (v), based on Fibonacci extension and wave symmetry.
On the downside:
- $34.00: Immediate support and pivot zone.
- $29.25 (0.236 retracement): Critical support level.
- A close below $29.25 would invalidate the bullish wave structure and open the door for further downside.
Hourly Chart: Early Signs of Impulse Development
Zooming into the hourly chart reveals early signs of a developing five-wave impulse from the January 27 low. The initial upward move shows clean momentum with higher highs and higher lows, supported by improving volume.
The Relative Strength Index (RSI) remains neutral around 50, indicating no overbought or oversold extremes—leaving ample room for upward expansion. A sustained move above $37 with rising RSI would strengthen the case for continued bullish development.
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Frequently Asked Questions (FAQ)
What is a descending triangle in crypto trading?
A descending triangle is a bearish or neutral chart pattern characterized by a flat support level and a descending trendline connecting lower highs. In uptrends, it often acts as a continuation pattern. A breakout above resistance suggests buyers have taken control, signaling potential upside.
What does the Elliott Wave Theory suggest about AVAX?
Elliott Wave Theory suggests AVAX completed a five-wave advance to $65, followed by a corrective ABC pattern. The current structure appears to be forming Wave (5) of a larger impulse, targeting $53–$55 if bullish momentum holds.
What is the significance of the $33–$34 support zone?
The $33–$34 range aligns with both the lower boundary of the descending wedge and the 0.382 Fibonacci retracement level. This confluence makes it a high-probability support zone where buyers are likely to step in.
Can AVAX reach $65 again in 2025?
Yes, if AVAX successfully breaks out above $41 and completes Wave (v) toward $55, sustained bullish momentum could push price back toward its previous high near $65—especially in a favorable market environment.
What invalidates the current bullish outlook?
A close below **$29.25** would invalidate the current Elliott Wave count and suggest that the correction is deeper than anticipated. This could lead to further downside toward $20–$25, depending on market conditions.
How reliable are Fibonacci retracements in crypto?
Fibonacci retracements are widely used in crypto technical analysis due to recurring market psychology and algorithmic trading behavior. While not foolproof, they offer valuable reference points when combined with price action and volume.
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Final Thoughts: High-Probability Setup with Clear Risk Parameters
Avalanche (AVAX) stands at a technical crossroads, but current evidence favors a bullish breakout scenario. The completion of a descending wedge, alignment with key Fibonacci levels, and emerging five-wave impulse structure all point toward further upside.
Traders should monitor:
- A confirmed breakout above $37 for early entry signals.
- Sustained volume and RSI strength to validate momentum.
- Protection below $29.25 to manage downside risk.
With clear targets at $47**, **$53–$55**, and potentially **$65, AVAX presents a compelling risk-reward opportunity for traders who act on confirmation rather than speculation.
As always, risk management is essential. Use stop-loss orders and position sizing wisely—especially in volatile crypto markets.
Core Keywords: Avalanche AVAX, descending triangle, Elliott Wave Theory, Fibonacci retracement, crypto price prediction, AVAX price analysis, bullish breakout, Wave (5) target