AVAX Stages Potential Recovery, Bulls Eye $41.50

Avalanche's native token, AVAX, appears to be staging a potential recovery, with signs of rising investor interest and price momentum. After a notable decline in recent days, AVAX has shown a U-turn, gaining attention from traders and investors due to its bullish pattern on the four-hour chart.

At the time of writing, AVAX was trading near $34.60, having surged by over 3.05% in the last 24 hours. However, participation appears to have dropped by 15% during the same period, suggesting that traders and investors may be waiting for confirmation or a complete shift in sentiment.

Despite declining participation, traders have shown strong interest in the asset. On-chain analytics firm Coinglass reported that AVAX's Open Interest (OI) climbed by 6.50% in the last 24 hours, hinting at the formation or buildup of new positions on both long and short sides. Additionally, investors and long-term holders have begun accumulating tokens, with exchanges seeing outflows of AVAX worth $3.54 million in the last 24 hours, indicating potential accumulation and further upside rallies.

This bullish activity in AVAX has been driven by its strong price action. According to AMBCrypto's technical analysis, AVAX formed a bullish inverted head and shoulders pattern on the four-hour time frame, poised for a breakout at press time. If AVAX breaches the pattern and closes a four-hour candle above the $35-level, there is a strong possibility it could initially rise by 8.50% to hit $38. If sentiment remains unchanged, it could further soar by 25% to touch $41.50 in the future.

However, despite the bullish outlook, AVAX was still trading below the 200 Exponential Moving Average (EMA) on the four-hour time frame at press time, indicating that it has remained on a downtrend. Its Relative Strength Index (RSI) of 53 suggested that it has the potential to continue its rally in the coming days.