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AVAX adds nearly 25% gains in one week, can it sustain the rally?

source-logo  invezz.com 21 May 2024 20:49, UTC

Avalanche (AVAX), a cryptocurrency platform that rivals smart contract network Ethereum, extended its gains on Tuesday. AVAX has rallied nearly 25% in the past week, technical indicators show that the token could continue climbing higher.

The project announced the launch of a new Layer 1 chain targeted at game developers.

Avalanche could extend gains this week

The Ethereum competitor is exchanging hands at $40.49 on Binance. Avalanche rallied over 38% from the April 13 low of $29.24 to $40.49. Starting May 15, AVAX price has formed higher highs and higher lows.

A daily candlestick close above the April 12 high of $46.89 could confirm a trend reversal in the asset. AVAX could target $47.32, the 50% Fibonacci retracement of the decline from March 18 top of $65.39 to the April 13 bottom of $29.24.

Prior to April 11, the $47 level held as steady support for Avalanche. A close above this level could erase the losses faced by AVAX holders in May 2024.

The Relative Strength Index (RSI), a momentum indicator climbed to 61, closer to the oversold zone at 70. The surge in RSI is in line with the price increase in Avalanche, there is no divergence observed on the 1-day AVAX/USDT price chart.

The Moving Average Convergence Divergence (MACD) indicator shows positive momentum underlying the uptrend in AVAX, between May 15 and 21, as seen in the chart below.

AVAX/USDT 1-day chart

AVAX is likely to hold on to its recent gains, unless the token closes below the May 15 high of $34.79. Avalanche could sweep liquidity at this level, AVAX could attempt a recovery post the correction, if one occurs this week.

The downside targets for AVAX are the May 15 low of $31.35 and the April 13 low of $29.24.

Avalanche recently announced the launch of a new Layer 1 chain that provides a secure platform to attract game developers. The project GameChain is powered by AVAX and will likely see new game development on its platform.

A new gaming chain appears! 🔺⛓️🎮@Gamestarter is launching GameChain, a new L1 providing a secure platform that's easy for game developers to build on. All powered by Avalanche.

And there’s more👇 pic.twitter.com/WjCcU7JTH8

— Avalanche 🔺 (@avax) May 20, 2024

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