Avalanche Eyes $20 Breakout Amid Crypto Rebound Triggered by China Tariff News

The network’s native cryptocurrency, Avalanche (AVAX), maintained its position hovering around $19 on Friday as tensions between the U.S. and China escalated. Earlier in the week, global equities markets were under extreme pressure after the U.S. invoked a new round of tariffs, and the market was in a risk-averse mode. AVAX dropped to $17.60 on Thursday, but it began to recover slightly, stabilizing for the weekend trading period. 

Tariffs Stir Investor Anxiety

The trade dispute intensified when China retaliated with a counter tariff of 34%. This raised fears of a long term trade war, causing investors to reassess their risk assets. The U.S. equity markets continued to decline, while interest in some cryptocurrencies, such as AVAX, started to increase as investors looked to invest in assets less correlated with geopolitical risk.

AVAX Price Analysis: Signs of Strength

Although other markets experienced fluctuations, AVAX traded within a narrow band of $18-$19 during the same period, which represents a somewhat tentatively positive sentiment among traders. There was a slight increase in trading volume on Friday, which signals a little bit of interest returning to the consolidation area. During times of economic uncertainty, crypto assets such as Avalanche continue to be viewed as a hedge, and because they are decentralized, they are less susceptible to disruptions in the global trading environment. This is why capital moves to crypto, or why the loss of confidence in conventional markets drives crypto adoption.

Market Outlook: Positioning for a Breakout

Avalanche is technically starting to find its footing. The token recently peaked at $22 but has fallen back to approximately $18.50. Should Bitcoin’s recovery continue, AVAX may follow suit and even break above the fundamental $20 resistance level. Although all Simple Moving Average (SMA) indicators remain bearish short term, AVAX is fortunate to be below the yellow, green, and red SMAs on the daily chart, with the greatest resistance being the red line at $19.88. Nevertheless, with every passing day the distance between the averages is decreasing; in other words, the bearish momentum is waning.

Momentum Indicators Show Mixed Signals

The Relative Strength Index (RSI) is currently at approximately 42.15, and this indicates that AVAX is marginally oversold to neutral. A rise in buying pressure could send the RSI beyond 50, and this would validate a bullish breakout.

In the meantime, trading volume has decelerated, an indication that selling pressure is subsiding. An increase in volume on any price rise would assist AVAX in breaking through resistance and testing the $20 level again.

Conclusion: Critical Juncture for AVAX

Avalanche seems to be at a juncture. If the volatility in the global markets persists, and investors move towards protection from fiat-correlated assets, AVAX can gain from increasing demand. A breakout success past $19.88 can pave the way for a rally towards $20 or more. Conversely, a breakdown in holding current support can have the token drop to about $17.50. Either way, traders will observe with keen interest as AVAX gains momentum from this consolidation phase.

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