Avalanche (AVAX) Shows Signs of Strength, But Resistance Near $2600 Stalls Its Momentum

Avalanche (AVAX) has been showing signs of strength recently, with a notable rally pushing its price toward the $26 mark. However, despite this upward

Avalanche (AVAX) has been showing signs of strength recently, with a notable rally pushing its price toward the $26 mark. However, despite this upward movement, the cryptocurrency has encountered stiff resistance near that level, slowing its momentum.

While buying interest remains strong, this resistance zone is proving difficult to surpass, leaving many to wonder what the next steps might be for AVAX.

In early May, AVAX was trading within a range that had been in place for nearly three months. During this period, the price oscillated between a low of $16 and a high close to $23. One key support level within this range, around $19.50, played an important role for the bulls.

This mid-range point became the springboard for a sharp price rally, as buyers stepped in confidently.

Starting from this support, AVAX climbed rapidly, gaining over 30 percent in just three days, hitting the resistance level close to $26.

This $26 area is not unfamiliar territory for AVAX. Earlier in the year, specifically around February, prices struggled to break through the $26.50 to $28 zone. Back then, this price range acted as a ceiling that the coin could not surpass for some time.

Today, that same area continues to act as a strong supply zone where sellers are waiting, which explains the difficulty AVAX has had moving beyond it despite recent gains.

Examining the technical signals, several indicators hint at a slowdown in AVAX’s bullish momentum. The Accumulation/Distribution indicator, which tracks buying and selling pressure, has remained positive throughout May, suggesting that demand is still relatively high.

However, the price itself is capped just below the resistance zone, which indicates hesitation among buyers. Additionally, the Moving Average Convergence Divergence (MACD), a tool used to gauge momentum, has crossed into bearish territory.

This bearish crossover suggests that the pace of buying is weakening and that the coin might face some downward pressure in the near term.

Adding another layer of insight, recent liquidation data reveals potential price targets if AVAX does experience a pullback. Liquidation heatmaps, which show where traders are likely to close positions under pressure, highlight significant clusters of orders around $21.50 and $21.

These levels also correspond with recent local lows seen in mid-May, making them logical targets for any short-term price corrections. Should AVAX decline, these points could act as strong support levels where buyers might step in again.

Despite this generally bullish outlook, a crucial turning point lies around the $22 mark. If AVAX fails to maintain price levels above $22 at the end of a trading session, it could trigger a bearish shift in market sentiment.

A drop below this threshold may invite more selling pressure and could lead to a deeper correction. Should such a pullback occur, the $19 level becomes particularly important.

This price point carries a high concentration of liquidation orders, meaning that if AVAX falls below it, volatility might spike, and further price declines could be expected.

The broader market environment will also play a significant role in Avalanche's price direction.

As with many altcoins, AVAX tends to follow Bitcoin's lead. If Bitcoin experiences a setback or significant pullback, it could weigh on the entire cryptocurrency market, including Avalanche.

Therefore, traders and investors should closely monitor Bitcoin's price movements, as they often set the tone for altcoin performance.