Avalanche (AVAX) – Confirmed a short-term double bottom formationPosted on Tuesday, January 25 2022 at 9:26 pm GMT+0000
Avalanche (AVAX) dropped 40% since the 20th of January, extending its profound structure of lower tops and lower bottoms. However, the recent formation of a double bottom pattern on the four-hour chart introduced an excessive upgrade to the short-term technical picture.
The double bottom pattern is a bullish reversal price pattern that occurs at the bottom of a downtrend and hints for a trend and momentum reversal from prior bearish directional action.
Momentum oscillators are conforming this price reversal pattern. The MACD is climbing above its signal line heading towards the zero threshold and the RSI is trending upwards above its equilibrium level.
Having overshot the 23rd of January high, buyers are expected to intensify efforts and push profoundly towards the zone formed by the pattern technical target at 78 and the 19th of January inside swing low at 81. Surpassing that, bulls will next aim for the January 20 high at 87.
Otherwise, should the bullish sentiment start to wane, the price will reverse back towards the base of the double bottom formation around 54, where any violation will bring about a resumption of the broad downtrend.
To summarize, the recent break of the 67 level confirmed the beginning of a new short-term bullish phase where buyers are expected to maintain full control likely driving the price initially towards 78.