Avalanche's AVAX token is trading at $10.02, hugging the upper edge of its Bollinger Band while a bearish momentum divergence flashes on the chart. The setup suggests the token could face a pullback before any meaningful recovery, with data pointing to a 70% probability that price revisits the $8.50 support level.
Bearish Divergence Signals Caution
The current price action shows a clear bearish divergence — price has pushed higher while momentum indicators like the Relative Strength Index have trended lower. That mismatch often precedes a reversal or a period of consolidation. Traders tracking the divergence see it as a warning that the recent uptick from lower levels lacks conviction.
On its own, the divergence doesn't guarantee a drop, but paired with the Bollinger Band resistance, the odds tilt toward a retest of lower support. The token has already struggled to break above the $10.50 zone in previous sessions.
Bollinger Band Squeeze and Resistance
Bollinger Bands measure volatility and identify overextended moves. AVAX is currently pressing against the upper band — a level that has historically acted as resistance during trending moves. The bands themselves are relatively narrow, suggesting a period of low volatility that often precedes a sharp directional move.
If price fails to push through the upper band, a retreat toward the middle band near $9.20 or the lower band around $8.50 becomes the more likely path. The bearish divergence reinforces that scenario.
What the Probability Model Shows
A probability model based on price action patterns assigns a 70% likelihood that AVAX will test the $8.50 support level before staging any sustained rally toward the $13 resistance zone. That $13 target represents the next major upside barrier, but the model suggests it won't be reached without a deeper shakeout first.
The $8.50 level has held as support multiple times over the past month, making it a critical floor. A break below that could open the door to further downside, but the model's base case is a bounce from that area rather than a breakdown.
For now, the market watches whether the 70% probability plays out — and whether $8.50 holds firm before any move higher.
