In our recent analyses, we have primarily focused on Bitcoin and Ethereum. Today, we turn our attention to Avalanche, a token that is currently showing a highly attractive technical setup based on several key parameters.

With the right conditions aligning, Avalanche could be positioning itself for a potential move toward new highs this year. Let’s dive deeper into the details.

Daily time frame analysis

AVAXUSD - 1 Day Time Frame

In the current market environment, many traders are asking an important question: "When does the price show sufficient signs of a trend reversal?"

First, it’s important to acknowledge that entering a position aimed at capturing a reversal is inherently riskier than trading in the direction of an established trend. However, if all necessary conditions are met, a reversal trade can be just as valid and strategic as any trend-following entry.

From a technical perspective, what’s crucial now for AVAX is how the price reacts to the newly formed support zone — a zone that was, not long ago, acting as a key resistance. This role reversal is one of the two critical conditions for a reversal entry.

The second condition is the liquidity sweep, where the price dipped below a previous low before reversing sharply and closing impulsively above the former resistance that had previously capped price advances.

Avalanche price target

Entering a trade at the right moment is essential, but properly managing the position afterward is equally important. Upon entering, a Stop Loss order could be placed below the internal higher low, as indicated on the attached chart.

Additionally, traders should remain alert. If the price closes back below the orange support zone — the same zone that justified the entry — it could be wise to consider selling part of the position. This step helps minimize risk and protect capital, even before the Stop Loss is reached.

Regarding targets, once the price reaches a Buy-Side Liquidity level, it would be prudent to take partial profits, securing gains while leaving the remaining portion of the position open to target higher liquidity levels. This strategy ensures a balance between locking in profits and staying exposed to potential further upside.