AVAX Momentum Builds as Stablecoin Ecosystem Expansion Drives 19% Weekly Surge
Market Structure Shifts Higher
- AVAX decisively managed to surpass 50-day EMA at the price of $24.37, turning the previous resistance into support
- ADX index at 51.9 is a signal of real trend strength forming after several months of consolidation
- KRW1 stablecoin is now available on Avalanche as a Circle’s Arc issue that is a clearway of ecosystem growth
Avalanche has ignited a fresh bullish wave, experiencing a remarkable increase of 19.05% during the last week to reach $31.57 following BDACS of South Korea’s launch of the KRW1 stablecoin on its blockchain before moving to Circle’s Arc. The move against the general direction is a reflection of the drastic monthly flip from $8.84, as buyers briskly entered the market with the backing of stablecoin issuance across the network. The main issue for traders: will AVAX maintain the trend and go above the key upper/lower switch point $24, hence targeting the mental mark of $40?
RSI Momentum Analysis
The RSI index daily timeframe is 34.6, hence I am not oversold anymore, but there is still room for upside continuation. The balanced reading implies that the 19% increase in prices has not placed the market in a state of overheating yet – this is a positive signal for swing traders who want to enter at a higher point.
In September, the RSI setups almost similar to these were observed before the multi-week upswing in Avalanche from $20 to $38, especially, when the ecosystem information was coupled. The launching of KRW1 stablecoin is the concrete base that underlies this. BDACS technology includes but is not limited to the integration of the blockchain protocol of Avalanche, which guarantees digital assets backed by the Korean won. The current value of their tokens is equivalent to a fixed exchange rate of 1:1 to the Korean won. With a neutral RSI, the swing traders can enter at low levels again in the case of a pullback towards the $24-26 area.
Trend Strength Building
The ADX entry at the level of 51.9 is a signal that the trend is getting very strong, but it is still not at the extreme level. To put it simply, the position in this area above 50 means that we are really seeing a directional movement that is not choppy consolidation. It is exactly what bulls required after months of sideways trading between $18 and $25.
The ADX shows that a transition is being made from the boundary conditions state to a trending state, while the stablecoin integration news serves as a structural change initiating the catalyst. The onboarding of KRW1 from Avalanche to Circle’s Arc confirms the ability of the platform infrastructure thereby possibly drawing other stablecoin issuers. Accordingly, it would be prudent for day traders to adjust their strategies for trading only momentum or continue setups instead of the mean reversion, which is especially fitting under the decision of trend strength readings being this high.
Moving Average Dynamics
Looking through the EMA ribbons, the price movement remains very straightforward. AVAX is resting over the MMAs as follows: 10-day ($23.84), 20-day ($24.38), and most significantly, the 50-day EMA at $24.37 – this level has been the one to reject three advances in December before the strong breakout of this week on volume.
AVAX is being over 10-day($23.84),20-day($24.38) and even more importantly the 50-day EMA at $24.37 – the level that rejected advances from the price three times in December is now on the page where this week’s convincing breakout on volume occurred.
The transition of the 50-period EMA from a resistance ceiling to a support floor symbolized a major change in the market’s arrangement. This previous resistance level at $24.37 is now adaptively transformed into a bull’s red line for any retracement it should secure. The 100-day EMA is seen underneath at $24.48, which leads to the formation of a supporting cloud in the $24-25 range, thus ensuring that all profit-taking actions will be accompanied by the stablecoin story coming to popularity.
Critical Price Levels
The short-range barrier is located in the space from $36.50 to the high monthly value of $37.00, where December peaks coincide with the monthly pivot point. This area is the next major obstacle for bulls, which will need persistent buying pressure and another likely positive factor for clearing it.
This week’s bullish momentum that pushed the support line above many EMAs has now made it look much more comprehensive. The major support for the currency rests at the $24.37 level (50-day EMA) whereas the $23.07 level is the S1 monthly pivot zone and the area of consolidation lows and is, therefore, the minor support.
The market structure is depicting the strength of buyers as long as they are able to maintain the prices above $24 during any type of retracement. If the prices drop below this level, the bullish speculative outlook will be largely undermined with some even stopping back toward $21.05 which is the where the long-term support of the 200-week EMA is.
Path Forward
The daily closes above $31 are essential for bulls to validate the breakout while the stablecoin adoption by AVAX ecosystem as a means of development provides the required accelerated cause of action. Targets immediately lie at $36.50 and the next stop will be the psychological $40 at the sustained momentum.
A bearish domino scenario is the case if the price strongly retracts from the current levels and plunges below the $24.37 mark on the trading volume – this would stop out new buyers and most probably lead to a retest of the $21 support level where the 200-week EMA lies in wait.
As the momentum indicators for the time being provide bullish visuals and the fundamental ground supports the growth of the utility of stablecoins, it is probable for AVAX to start consolidating within the range of $28-32 before it tries a move towards the $36.50 resistance cluster discerned.
