- Avalanche (AVAX) is poised for a potential 20% rally, with technical indicators and on-chain metrics suggesting a price target of $30.
- Despite a recent decline in profitable addresses, lower selling pressure and bullish signals indicate a promising outlook for the token.
Avalanche (AVAX) is on the brink of a potential breakout, with technical indicators signaling a possible rally of up to 20% in the near future. The DeFi token has recently experienced a drop in the number of profitable addresses, with 36% of wallets holding AVAX currently sitting on unrealized gains. Despite this, the combination of on-chain metrics and bullish technical signals suggests a favorable outlook for the token. Here’s a closer look at why AVAX could be heading toward a $30 target.
On-Chain Metrics Bolster Bullish Outlook
Avalanche’s recent decline in profitable addresses may initially seem concerning, but it actually provides a foundation for a bullish thesis. According to IntoTheBlock data, 36.49% of wallet addresses holding AVAX are currently in a position of unrealized gains. This statistic is significant because it indicates that a large portion of AVAX holders are not in immediate need to sell their assets, reducing the likelihood of a market-wide sell-off.
The Global In/Out of the Money (GIOM) metric, which tracks the profitability of holders, supports this view. With a significant portion of AVAX holders sitting on unrealized gains, the selling pressure on the token is likely to be diminished. Furthermore, the Active Addresses by Profitability metric, which examines addresses that have transacted within the last 30 days, reveals that 34.13% of these addresses are profitable. This aligns with the GIOM data, reinforcing the notion that the selling pressure is relatively low.
Technical Indicators Favor a Price Surge
In addition to the on-chain metrics, technical indicators are painting a bullish picture for AVAX. Since peaking at $65.39 on March 18, the token has been in a downward trend. However, this trend appears to have reversed as of September 12, when AVAX broke out of its previous downtrend. Current technical analysis suggests that AVAX could experience a significant upswing, with a potential price increase of 20.60% bringing it closer to the $30 mark.
Resistance levels at $28.59 to $29.43 have been identified in the AVAX/USDT daily chart. This resistance zone represents an imbalance that could be tested as the token approaches these levels. The Moving Average Convergence Divergence (MACD) indicator, which measures momentum, is showing green histogram bars above the neutral line. This suggests that AVAX is likely to continue its bullish momentum and could push toward the $30 target.
Avalanche’s current market dynamics present a compelling case for a potential rally. The decrease in profitable addresses might initially seem like a bearish signal, but it actually indicates a lower likelihood of immediate sell-offs. Coupled with positive technical indicators and a recent breakout from a downtrend, AVAX appears poised for a significant price movement. As the token inches closer to its resistance levels, investors should watch for further bullish signals that could drive AVAX toward the anticipated $30 target.
