Avalanche grapples with serious bearish outlook despite AVAX’s 57% rebound to record high

Key Avalanche takeaways:

• Avalanche’s native token AVAX records back-to-back gains following Monday crash.
• The cryptocurrency’s upside moves come in the wake of similar recover actions across the cryptocurrency market.
• Nevertheless, it risks running into bears as AVAX/USD forms a classic downside pattern.

YEREVAN (CoinChapter.com) — Avalanche’s native asset AVAX was among the biggest gainers in the previous 24 hours, as its prices jumped almost 12% in the said period.

Related: AVAX rallies 13.29% as Avalanche announces “big upgrade,” eyeing reduced fee structures.

In detail, the AVAX/USD exchange rate reached a new record high at $79.93 following a 7.89% intraday rise. Traders flocked to the pair after assessing Avalanche’s partnership with Kyber Network to launch multi-chain dynamic market maker KyberDMM, with liquidity mining incentives worth $5.8 million sponsored by the Avalanche Rush program.

“Incentives will be distributed to liquidity providers of 7 eligible pools. This will be done in 2 phases to give users more time to get familiar with KyberDMM on Avalanche,”

the announcement read.

AVAX demand prospects

Incentivization aims to attract more liquidity providers to KyberDMM, ensuring an overall trading and liquidity provision experience for Avalanche ecosystem users, Dapps, and NFT games. In turn, the strategy promises to attract developers to build decentralized applications smoothly atop Avalanche’s public ledger, boosting appetite for AVAX, its in-house currency.

The speculation alone may have boosted AVAX’s interim appeal among traders, causing it to spike to ita all-time high. Additionally, the cryptocurrency also received a push from an overall crypto market recovery. Bitcoin and Ethereum shook off concerns surrounding China’s impending housing market crisis and printing 12.15% and 18.82% retracement rallies.

Similarly, AVAX jumped by more than 57% from its local bottom of $50.68.

Technical setup points prices towards $42.30

The latest buying period has triggered a classic technical setup that sees AVAX falling to as low as $42.30.

Dubbed as Rising Wedge, the structure develops as the price moves upward inside a range defined by two rising, converging trendlines. The price typically fluctuates inside the range and heads higher but eventually breaks below the lower trendline. In doing so, it targets levels located at length equal to the maximum Wedge distance.

Related: Avalanche (AVAX) could continue the bullish streak; 3 reasons why

AVAX seems to have been inside a similar pattern, as shown in the chart below.

Depending on the breakout point, the Avalanche token could drop to anywhere between $58.69 and $42.30.