Key Takeaways:
- Terra expanded its UST reserve, purchasing $100 million-worth of Avalanche tokens.
- AVAX responded with a 6% jump, trading over a significant resistance.
- The digital asset flashed signs of upcoming correction.
YEREVAN (CoinChapter.com) – Avalanche rallied by over 6% after Terra (LUNA) announced that it has $100 million worth of AVAX tokens to the reserve that aims to maintain the peg between TerraUSD (UST), a stablecoin, with the U.S. dollar.
Also read: Bitcoin-pegged stablecoins? Terra (LUNA) says yes and buys up $125M in BTC.
Avalanche (AVAX) daily chart
The AVAX/USDT exchange rate stood at over $88.5 in Friday’s Asian-Pacific session. The token rebounded from significant support at approximately $82 and attempted to erase its Apr. 4-6 losses. Moreover, AVAX broke a major resistance trendline, retesting it ten days later as support.
In detail, the digital asset formed a Symmetrical Triangle that featured the mentioned down-sloping resistance and a rising support line. The former hindered AVAX’s upside impulses since establishing an all-time high of $147 on Nov. 21.
Also read: Crypto market drops 6% after Fed announces $1.1T yearly quantitative tightening.
The Symmetrical Triangle is typically a continuation pattern. In other words, it predicts that the trend preceding the formation would continue after the Triangle is exhausted. AVAX broke the Triangle’s resistance, but Avalanche bulls have to put substantial weight behind the rally to maintain it.
Meanwhile, the trading volumes subsided on Apr. 8, hinting at a possible correction. Moreover, trend-based oscillator MACD printed red bars in the histogram, implying that the bearish trend is not yet over despite the latest upside move.
