Monday’s rangebound broader market did not stop the likes of Avalanche from maintaining its winning streak. However, the DeFi alt was reaching the concluding chapter of its bull rally and an important test lay ahead on the chart. Should bulls emerge triumphantly, AVAX could add on a further 50% rally before bears can respond. At the time of writing, AVAX traded at $90, up by 4.6% over the last 24 hours.
Avalanche Daily Chart
Since declining to a 3-month low on 21 January, Avalanche has made steady progress within an ascending triangle. The technical pattern is formed once bulls start to gain dominance through a chain of higher lows. The final hurdle is present at the upper trendline, above which bulls can assert more dominance.
For AVAX, the situation could not be more straightforward. A daily close above $100 can create an upwards breakout and a chance for AVAX to stretch gains to $150. The Visible Range (VR) profile helped support the argument by illustrating weak resistance levels above the triangle. As per the VR, traders had placed only a handful of bets above $100, and the region between $100-$150 was devoid of high liquidity. Simply put, AVAX could travel to $150 swiftly after breaking away from its triangle.
Furthermore, the indicators showed that the market was for the bulls to lose. The daily RSI was trading above 60 and no immediate hurdles were present to prevent the index from touching 70. A bullish crossover was also available on the MACD and Directional Movement Index to assist long setups.
Price Strategy
Since a technical pattern was in play, trading for a breakout was among the most rewarding strategy one could apply. Traders can up long positions at $110 and set take-profit and stop-loss at $150 and $70, respectively. The trade setup carried a 1.14 risk/reward ratio.