Avalanche Forms Bullish Wedge Similar to Chainlink's 52% Breakout Setup

Avalanche (AVAX) has recently exhibited a compelling technical pattern that has drawn comparisons to the breakout seen in Chainlink (LINK), a move that has sparked optimism among traders and analysts. Following a short-term pullback, AVAX has rebounded strongly, gaining over 4% in a single day and forming a falling wedge pattern — a well-documented bullish setup in technical analysis. This pattern, which is now nearing a critical juncture, mirrors the structure that preceded a 52% surge in LINK's price earlier this year [1].

The similarity between AVAX and LINK’s chart formations is not coincidental. Chainlink successfully broke out of a falling wedge pattern, rebounded off the 200-day moving average, and reclaimed the 265-day moving average before launching into a strong upward trend. AVAX is now following a similar path, having retested and bounced off the 200-day moving average and currently pressing against the 265-day moving average at $26.54 [1]. A successful breakout above this level, accompanied by expanding trading volume, could signal a continuation of the bullish momentum and potentially push AVAX toward the $38 level [1].

Currently, the token is in a phase of consolidation after forming a clear wedge on higher timeframes. This pattern has emerged as a key focal point for traders, who are closely monitoring the resistance levels to determine the next likely direction of the price. While the fractal setup is not yet confirmed, the alignment with LINK's recent movement has raised expectations among market participants [1]. A decisive move above the 265-day MA would not only confirm the pattern but also validate the increasing sentiment favoring AVAX.

Underlying the technical optimism is the continued growth of the Avalanche ecosystem. The blockchain has seen rising activity in decentralized applications and developer engagement, which has bolstered its reputation as a leading layer-1 protocol. These fundamentals, combined with the current technical setup, contribute to a compelling narrative for AVAX's potential upward trajectory.

However, as with any technical signal, the fractal pattern does not guarantee a specific outcome. Market conditions can shift quickly, and AVAX must maintain its position above the 200-day moving average to avoid a potential reversal. Investors are advised to remain cautious, employing strict risk management strategies and conducting thorough due diligence before acting on the pattern [1].

The broader cryptocurrency market has also been trending in a positive direction, with Ethereum (ETH) rebounding from earlier losses and contributing to improved sentiment across altcoins. AVAX’s recent movement has benefited from this environment, gaining strength amid a general upward trend [1]. This context reinforces the importance of tracking both the broader market and AVAX’s individual technical developments.

As the market awaits confirmation of the fractal setup, the convergence of technical and fundamental factors makes AVAX an asset to watch closely. A breakout could signal the start of a new bullish phase, potentially aligning AVAX with the performance trajectory of other high-performing altcoins like Chainlink. Investors are encouraged to remain informed and prepared for a range of possible outcomes as this pattern develops. [1]

Source: [1] Brave (url: https://bravenewcoin.com/data-and-charts/assets/IOTAI/iotai)

[2] Brave (url: https://bravenewcoin.com/data-and-charts/assets/RETAKE/retake-tv)