- The cryptocurrency market experienced a sharp pullback with Bitcoin dropping to $105,000 and Ethereum to $2,600, causing AVAX to decline over 9% weekly.
- AVAX is developing a 'Power of 3' setup on the 15-minute chart, consisting of accumulation ($21.61-$21.12 range), manipulation (breakdown to $20.72), and potential expansion phases.
- A breakout above $21.61 could trigger a bullish reversal with a projected upside target of $22.55, representing a potential 7.71% rally from current levels.
- The reversal setup remains valid only if AVAX holds support at $20.72, as a sustained break below would invalidate the pattern and increase downside risk.
Date: Wed, June 04, 2025 | 06:10 PM GMT
The cryptocurrency market experienced a sharp pullback recently, dragging most major tokens into the red. Bitcoin (BTC) briefly dropped to around $105,000, while Ethereum (ETH) slipped to $2,600—both retracing from recent highs. This mini correction also impacted several altcoins—including Avalanche (AVAX).
AVAX saw a weekly decline of over 9%, trimming its monthly gains to just 5%. But despite the dip, a key structure forming on the lower timeframes is starting to show signs of strength — potentially hinting at a short-term bullish reversal.
Power of 3 in Play?
Zooming into the 15-minute chart, AVAX appears to be developing a classic “Power of 3” setup — a strategic market structure popularized by smart money traders. This setup consists of three critical phases: accumulation, manipulation, and expansion.
Accumulation Phase
Earlier this week, AVAX was seen trading sideways within a narrow price range of $21.61 to $21.12. This type of quiet consolidation is typical of the accumulation phase — a zone where institutional traders often begin building long positions away from retail attention.
This range-bound action suggested that the market was gathering liquidity before making its next directional move.
Manipulation Phase
Then came a sudden breakdown. AVAX plunged below the accumulation range, briefly hitting $20.72. This sharp move likely flushed out stop-losses and triggered panic selling among retail traders — a classic hallmark of the manipulation phase.
Interestingly, this move didn’t last long. The price bounced near the $20.72 support, suggesting that the breakdown may have been a false move — a trap designed to shake out weak hands before a reversal.
What’s Next for AVAX?
If AVAX manages to reclaim the $21.12 level, it could mark the transition into the expansion phase. A confirmed breakout above the upper range boundary at $21.61 would further strengthen the bullish case.
The projected upside target based on the pattern sits around $22.55, suggesting a potential rally of 7.71% from current levels. however to keep this reversal setup alive AVAX must hold the support of $20.72. However, to keep this reversal setup alive, AVAX must hold the support at $20.72. A sustained move below that level would invalidate the pattern and increase the risk of further downside.
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