Date: Sat, May 17, 2025 | 05:26 AM GMT
The cryptocurrency market is showing strong signs of recovery, with Ethereum (ETH) continuing to lead the charge. ETH has climbed over 56% in the past month and is now trading near the $2,500 mark. This upward momentum is lifting investor sentiment across major altcoins , including Avalanche (AVAX).
AVAX has recorded gains of over 19% this month, cutting its yearly losses to 35%, but its recent pullback is drawing attention. The token is now retesting a key breakout level, raising the possibility of a strong bounce back.
Source: Coinmarketcap Retesting Inverse Head and Shoulders Breakout
On the daily timeframe, AVAX has formed a classic inverse head and shoulders pattern, a bullish reversal formation that often signals the end of a downtrend and the beginning of a new upward phase.
The pattern was confirmed when AVAX rallied from the right shoulder near $19.50 and broke through the neckline resistance around $23.50. This breakout pushed the price as high as $26.81, before a pullback took over.
Avalanche (AVAX) Daily Chart/Coinsprobe (Source: Tradingview) Now, AVAX is retesting the neckline zone, hovering near the $22.86 mark. This level, which once acted as major resistance, is now a critical support. A successful retest could pave the way for further upside.
What’s Next for AVAX?
The area between $22 and $23 is crucial. Holding above it would likely confirm the breakout’s strength and keep the bullish structure intact.
- If support holds: The next technical target sits near $32, based on the measured move from the head and shoulders pattern — representing a ~40% potential gain.
- If support fails: A breakdown below $22 could invalidate the pattern, increasing downside risk toward the 100-day moving average support at $21.28.
Conclusion
AVAX’s current retest of a major breakout zone puts it at a pivotal moment. If bulls defend this support successfully, Avalanche may be poised for a strong move higher — especially if broader market sentiment continues to improve.
All eyes now turn to the $22–$23 zone. A bounce here could be the confirmation traders are looking for.
Disclaimer: This article is for informational purposes only and not financial advice. Always conduct your own research before investing in cryptocurrencies.
