June has been a devastating month for crypto investors. But despite this, we are seeing some recovery as major coins build modest upward momentum. AVAX is not any different, and the coin has now managed to reclaim an important support zone after crashing in June. So, where will it go next? Is the rally short-lived or permanent? Here are some highlights:
AVAX had crashed nearly 65% in June alone.
However, the coin has rallied in the past two days with a 15% gain in 24 hours.
More importantly, AVAX has reclaimed the $14 support.
Data Source: TradingView
Where will Avalanche go from here?
Well, there are many scenarios at play here. First, the rally we have seen by AVAX over the past two days corresponds to a broader recovery in the market. This could suggest that perhaps we were seeing a short-term relief after massive sell-offs last week. If that’s the case, then AVAX could lose upward momentum very fast.
The good news though is that the coin is now trading above the $14 mark. For the most part in 2022, this support has held strong even in the face of massive bear pressure. So, even if the coin was to pull back from its current 2-day rally, the bulls will have a better chance of defending the $14 mark than they did a week ago.
However, failure to keep $14 could mark the beginning of a major decline for AVAX. In fact, after $14, the only other real support is at $10.70.
Why AVAX still poses major risks?
Despite rising above the $14 mark, we still see major risks with AVAX. First, the coin has in the past few weeks struggled to keep the momentum going above $20.
As such, we expect it to begin losing momentum as it strives toward $20. This could lead to a sharp pullback that eventually puts the $14 support under real threat.