Avalanche (AVAX) is attracting attention as one of the most technically poised altcoins for a strong upside reversal. After facing persistent downward pressure over the past few weeks, the AVAX token appears to be rebounding from a key support level, setting the stage for a possible breakout that could deliver up to 40% gains in the near term.

The broader crypto market has been subdued, with Bitcoin struggling to break above the $95,000 resistance zone. In contrast, Avalanche’s price action has started to signal a hidden bullish divergence—often a precursor to a significant reversal. Analysts are now closely watching AVAX as it retests its recent lows and prepares for what could be an explosive move.

AVAX at a Technical Turning Point

Since March 2025, the AVAX price has remained trapped below the $22 resistance level. Despite occasional rebounds, bearish momentum has consistently halted any sustained breakout. However, recent price behavior suggests that bears may be losing control, particularly as the price begins to consolidate around the $20 psychological level—a historically significant zone of accumulation.

This consolidation is occurring alongside narrowing Bollinger Bands, indicating a sharp drop in market volatility. Such patterns often precede major price movements. At the same time, the Chaikin Money Flow (CMF) indicator has shown a sharp rebound from lows not seen since July 2024. Historically, when CMF rebounds from below -0.15, AVAX has seen price rallies as large as 200% in the following months.

Market Structure and Hidden Bullish Divergence

AVAX has been forming lower highs and lower lows, a structure generally associated with a bearish trend. However, beneath this pattern, technical analysts have identified a hidden bullish divergence on the daily chart. This signal emerges when price action continues to fall while momentum indicators like the RSI or CMF begin to rise, often preceding a reversal in price direction.

This hidden divergence adds weight to the argument that AVAX is nearing the end of its current correction and could soon break above local resistance. The critical level to watch is $22. A decisive close above this threshold, sustained over a few days, would likely confirm a bullish breakout and open the door for a move toward $25 or even higher.

Risks of a Double Top and Bearish Rejection

Despite the bullish signals, the market is not without risks. AVAX recently faced its second rejection from the $22 neckline—raising concerns about the potential formation of a double top pattern. If bears regain momentum and push the price below $20 again, it could signal a breakdown toward lower support zones, putting the bullish thesis on hold.

That said, volume indicators suggest otherwise. The declining volume and volatility hint that the market may simply be in a state of accumulation rather than distribution. If true, the breakout could be a matter of time rather than possibility.

Short-Term and Mid-Term Price Outlook

In the short term, AVAX must hold above $20 to maintain its bullish structure. A few daily closes above this level would support a case for further upside. A confirmed breakout above $22 would pave the way for a target of $28—a move representing a 40% increase from current levels.

In the mid-term, Avalanche’s prospects remain favorable, especially given its strong fundamentals and ongoing ecosystem development. As investor sentiment recovers and liquidity flows back into altcoins, AVAX could outperform peers if it successfully breaks above key technical thresholds.

Conclusion

Avalanche is showing signs of strength at a critical support zone, and the market could be gearing up for a significant price move. If current technical patterns play out and AVAX clears the $22 hurdle, a 40% rally may soon be on the table. Until then, traders and investors will be closely monitoring price action for signs of confirmation—or a deeper retest of support.