Will Upcoming Upgrade push AVAX toward $21?

The third quarter was not very favorable for Avalanche. As highlighted in a recent article, the total revenue dropped by 94.1%, following a decline in daily transactions by 65.5% and a 76.2% drop in transaction fees.

Read More – Avalanche: Q3 Total Revenue dips by 94%, Ava Labs drama to be blamed?

Nevertheless, the network has been focused on building for the long term. Notably, Avalanche will be undergoing a network upgrade at the beginning of next week, justifying the said narrative. Dubbed Banff, the upgrade was activated on the Fuji testnet on October 3. The mainnet upgrade will, however, take place on the 18th.

The said reform intends to add support for creating Proof-of-Stake Subnets. Top exchanges like Binance have already extended their support for the said upgrade.

AVAX Price

On the price front, AVAX has been on a downtrend since mid-September. From trading around $22, the price of the #18th ranked token has dropped down to $16. However, it is currently at an interesting juncture, for it is approaching two crucial moving averages on the daily.

Source: TradingView

The last two times, the 50 and 100 MA acted like a resistance [yellow] and blocked AVAX’s recovery rally. However, before that, they supported the asset’s price to rally [pink]. During the latter instances, the market had moderate buying momentum, and that’s why AVAX could appreciate in value. However, during the former instances—when the prices dropped on approaching the MAs—the market was characterized by underwhelming bull support.

Over the past day, AVAX’s RSI reading has inclined from 32 to 39, bringing to light the gradual stepping-in of bulls. Over the next few trading sessions, if Avalanche manages to gather steam, then it’d be in a position to break above the upper trendline of the descending channel. It has been engulfed under this trendline since mid-September.

Doing so will open the door for it to head towards $20-$21. Post that, if the upgrade goes on successfully next week and optimistic cheer spreads among community members, then we might see an extension of the uptrend.

However, if bulls fail to dominate and if Avalanche drops into the oversold region, then a period of correction can come.