Avalanche price can double by summer as AVAX's 20% weekly rally rekindles 'bull flag'
A sharp upside retracement in the Avalanche (AVAX) market this week has raised its possibilities to rise by another 100% in Q2.
The bullish outlook primarily appears in the wake of AVAX's multi-month bull flag setup, which formed after a strong price move higher to over $150, an all-time high in the Avalanche market. In detail, the setup is a downward sloping channel, denoted by two parallel trendlines against the previous trend, with volumes declining to underscore a weakening downtrend.
In a perfect scenario, bull flags resolve with a breakout move above their upper trendlines, followed by an extended uptrend, with the profit target at length equal to the size of the underlying asset's previous uptrend (also called flagpole).
That could have AVAX's price to undergo a similar upside move in the coming weeks, beginning with a close above its interim resistance of 20-week exponential moving average (20-week EMA; the green wave in the chart above) and later with a breakout above the flag's upper trendline.
As a result, AVAX may eye a run-up towards $157, up more than 100% from its current prices near $77.
The latest bout of buying in the Avalanche market has appeared largely due to its strong positive correlation with Bitcoin (BTC).
Notably, AVAX and BTC were moving almost perfectly in tandem at the beginning of 2022, with their correlation coefficient coming out to be between 0.90 and 0.99. However, as of March 17, the reading had corrected to around 0.79, still underscoring Avalanche's continued preference of mirroring the benchmark cryptocurrency's moves.
Nonetheless, the correlation exposed AVAX to the same downside risks that Bitcoin has been facing since November 2021, including Federal Reserve's quantitative tightening and
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