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Why AVAX have chances to make 2x in March 2023
AVAX pumps up 30% after the partnership with Amazon. Technical analysis shows that AVAX can make double its price in March 2023 breaking out of a falling wedge.
Written byEdna Buckley
January 13, 2023
- Technical and fundamental indicators suggest that the AVAX will continue to rise into March.
- The AVAX/USD pair has now entered the breakout phase of a falling wedge pattern. The target for the breakout is around $34, which is a 115% increase from current prices.
- The bullish setup of AVAX appears as Ava Labs becomes an official provider of blockchain solutions to AWS. The association will enhance the value of Avalanche among businesses and governments in an ideal situation, this will increase demand for AVAX tokens.
- AVAX's bullish falling wedge pattern is evident amid improving macroeconomic conditions for riskier assets, this may have an effect on the crypto market in the near future.
- If the price fails to close above the resistance line of $15.45 decisively, the probability of a decline toward its next support line is increased near $10.50.
Avalanche has begun the year with a bang, increasing by nearly 55% in the first two weeks. Now, a combination of technical and fundamental indicators suggests that the token will continue to rise into March.
The breakout of AVAX is going on
The AVAX/USD pair appears to have been forming a falling wedge pattern since May of 2022 and has now entered the breakout phase of this pattern.
A falling wedge is formed when the price trends lower inside a range defined by two converging, downward-sloping trendlines. The pattern is complete when the price breaks out of its range to the upside. As a general rule, the price can increase as far as the difference between its upper and lower trendlines.
AVAX/USD 1D chart featuring falling wedge setup. Source - TradingView
Using the theory behind AVAX's falling wedge pattern, the target for the breakout is around $34, which is a 115% increase from current prices.
Amazon partners with Avalanche
The bullish setup of AVAX appears as Ava Labs, the company behind the Avalanche network, becomes an official provider of blockchain solutions to Amazon Web Services (AWS).
Notably, the company will add new features that make it simpler for developers to run an Avalanche node through the AWS Marketplace. Additionally, developers can create Avalanche subnets with a few clicks.
The association will enhance the value of Avalanche among businesses and governments in an ideal situation, this will, in turn, increase demand for AVAX tokens. These prospects have contributed to the increase of the Avalanche token by nearly 30% in a 24-hour adjusted timeframe.
Macro increases the likelihood of a bullish scenario
AVAX's bullish falling wedge pattern is evident amid improving macroeconomic conditions for riskier assets, this may have an effect on the crypto market in the near future.
According to a Bloomberg survey, economists expect a decrease in the U.S. Consumer Price Index. A low inflation rate may lead the Federal Reserve to stop increasing interest rates, which would leave investors with extra cash to invest in riskier markets.
The next CPI report will be released on January 12th. JPMorgan Chase believes there is a 20% chance that the S&P 500 will increase by 3-3.5% if the December inflation figure is 6.4%. If the inflation reading is between 6.4 and 6.5%, the index could increase by 1.5-2%. This scenario has a 65% probability.
JPMorgan's game plan on CPI day. Source - Bloomberg
As a result, AVAX/USD could increase alongside the S&P 500 index, as a lower inflation reading would lead to a higher inflation rate, and the rally would continue at least until the Fed's meeting on January 31.
Negative consequences are still possible
Meanwhile, AVAX exhibits indecision near $15.75, a significant resistance level that was supported during the June to November 2022 period.
If the price fails to close above the resistance line decisively, the probability of a decline toward its next support line is increased near $10.50. The same degree was of assistance in June-July 2021, as evidenced by the following chart:
AVAX/USD 3D chart. Source - TradingView
AVAX is vulnerable to a 35% decline from its current price levels, this would invalidate the falling wedge pattern entirely.
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