Avalanche to add the USP stablecoin into its list of offerings. The battle between AVAX bulls and bears intensifies as sell pressure threatens to erase recent gains. The crypto market just concluded an interesting week marked by an extension of the bullish momentum at the start of this year.
Avalanche (AVAX) has recently seen a 55% increase in price and has potential to continue rising in March due to a combination of technical and fundamental indicators.
One indicator is the falling wedge pattern on the AVAX/USD pair, which is a technical pattern that forms when the price trends lower inside a range defined by two converging, descending trendlines. The pattern resolves as the price breaks out of its range to the upside. As a rule of technical analysis, the price can rise as high as the distance between its upper and lower trendlines. Applying this theory on AVAX's falling wedge pattern brings the token's breakout target at around $34, a 115% increase from current price levels.
Another factor that is driving the price of AVAX is Avalanche's partnership with Amazon Web Services (AWS). Ava Labs, the developer of the Avalanche network, has become an official blockchain solution provider to AWS. This partnership will make it easier for developers to run an Avalanche node through the AWS Marketplace and create Avalanche subnets with a few clicks. This will increase Avalanche's utility among enterprises and governments, which in turn could boost demand for AVAX tokens.
Another factor that is contributing to AVAX's positive outlook is the improving macroeconomic fundamentals for riskier assets. According to a Bloomberg survey, economists are positioned for a drop in the United States Consumer Price Index (CPI). Ideally, declining inflation may prompt the Federal Reserve to stop its interest rate hikes, which leaves investors with excess cash to invest in riskier markets. Therefore, AVAX/USD could rise alongside the U.S. benchmark index on a lowered inflation reading, with a rally continuing at least until the Fed's meeting on Jan. 31.
It is worth mentioning that there are also downside risks to this bullish scenario. AVAX shows signs of indecision near $15.75, a strong resistance level that was supported during the June to November 2022 session. If the price fails to close above this resistance line decisively, the likelihood of a correction towards its next support line near $10.50 increases. This would represent a 35% drop from its current price levels, a move that could invalidate the falling wedge setup altogether.
Auteur Brian Leclere