Although Bitcoin is one of the most popular virtual currencies in circulation and with which we can invest, pay or make transactions, there are many more. Cryptocurrencies can be purchased, but you can also choose to mine them from home. If you are considering buying or investing in cryptocurrencies, it is expected that the virtual currency that we will talk about today could double its price in the summer.
The 20% rise in Avalanche (AVAX) could reignite the “bull flag” and potentially double the price of Avalanche in the summer, although the almost perfect correlation between Avalanche and Bitcoin so far this year could spoil these expectations.
AVAX could see a rise towards $157
This week AVAX has posted a sharp pullback in the market, which makes it largely possible for it to go up another 100% in the second quarter of this year. An upward trend that was confirmed after several months in which AVAX formed a price movement above $150, the all-time high in the market for this cryptocurrency.
This has created a perfect scenario where “bull flags” denote “a breakout move above their upper trendlines, followed by an extended uptrend, with profit target length equal to the size of the uptrend.” previous of the underlying asset (also called flagpole), as explained by Cointelegraph”.
This fact could trigger the price of AVAX to suffer an upward trend in the coming weeks that would start with a close above its intermediate resistance of the 20-week exponential moving average (see the green wave in the chart) for later lead to a breakout above the upper flag line. The result? A rise to $157 that would mean more than 100% of its current price of around $77.
AVAX Weekly Price Chart
Relationship between AVAX and Bitcoin
The tendency for users to buy AVAX, to a large extent, comes from its strong positive correlation with Bitcoin. “AVAX and BTC were moving almost perfectly in tandem in early 2022, with their correlation coefficient coming out between 0.90 and 0.99.” However, as of yesterday, the reading has corrected to around 0.79.
Avalanche Cryptocurrency (AVAX)
Despite its positive relationship, AVAX’s correlation with Bitcoin also exposes it to the same downside risks that BTC has been experiencing since November 2021, taking into account the Federal Reserve’s quantitative adjustment and also the war between Russia and Ukraine. .
AVAX’s bullish outlook could be cut short as long as they match the Bitcoin price accurately. Joel Kruger, strategist at cryptocurrency exchange LMAX Digital, told Bloomberg “A rate hike will strangle equity markets. So if we see a mass exodus out of risk assets, it will weigh on everything.”