Technical Analysis

AVAX and RUNE show strength in crypto market

Published: Oct 21, 2024

RUNE and AVAX are gaining traction as they test key resistance levels, with RUNE aiming for $7 and AVAX approaching its $31 neckline. Total3 market cap shows bullish signs, eyeing a return to $780 million highs.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

RUNE:

Market context

We've been focusing on RUNE, particularly around the key $5 level, where resistance has been shown over the past few weeks. Importantly, we had a breakout on September 23rd, which is worth noting because this is a key resistance that, if we break, could show potential for $7.00 to come into play.

The overall market, especially the majors like BTC & Solana, has been trading well, and Ethereum is pushing key levels, showing bullish momentum across the board.

1. Weekly chart showing RUNE-TetherUS price action with left and right shoulder pattern, resistance levels, and RSI indicator highlighted.

Looking at the Total3 market cap (excluding Bitcoin and Ethereum)

We can see that it's printed with a large head and shoulders, which could suggest the shift now to a more bullish performance in strong ALTs like rune. The liquidity is building up, and it's showing potential strength around $530 million.

The key number here is $600 million, where we've historically seen stronger buying activity. If this strength continues, we could see Total3 push back toward the highs of $780 million seen in March, provided there's enough market support.

2. Weekly chart of crypto market cap excluding BTC and ETH, illustrating head and shoulders pattern, breakout zone, and resistance levels.

Playbook

We'll be keeping an eye on RUNE, particularly around the $5.50 and $5.00 levels, as it establishes a new range. If it can hold and push past this level, we're looking at $7.00 next. Breaking $7.00 would lead to even more upside, with potential targets of $10.00 to $11.00, driven by increased market activity.

Key levels

$5.00 - $5.50 (current resistance range)
$7.00 (next key level)
$10.00 - $11.00 (mid - to longer-term target)

Cryptonary's take

RUNE isn't an asset we're invested in right now, but it's one of our CPRO picks for a reason. The asset saw a massive 1,300% move leading up to May, showing strong demand. With the current market conditions and momentum in the crypto space, this is a strong contender to watch. Accumulating within this range while looking out for future bullish market catalysts could make this a great play moving forward.

AVAX:

Market context

AVAX has been one of the strong performers this cycle, with a notable 630% move from the lows before October's run. Although it hasn't been as explosive as some meme coins, its price action has been solid, showing aggressive buying during periods of upside momentum. The recent consolidation phase is correlated with the overall market, so the bearish price action isn't necessarily negative.

3. AVAX-USDT weekly chart showing price consolidation, key resistance levels, historical price movement, and RSI indicator at current support levels.

Looking at the chart, we've identified an inverted pattern of head and shoulders. The left shoulder, head, and right shoulder are clearly formed, and what's interesting is that the right shoulder has been bid higher than the left. This tells us that buyers are willing to pay more for AVAX now than they were back in July, which is a good sign.

We traded into the neckline on September 23rd, using it as resistance, which is key. If we break above that $31 neckline, we could see a strong flip in sentiment, signaling a potential for more upside. Historically, around this level, AVAX has shown bullish price action, particularly in April and January.

Attempts to push the price lower were met with immediate buying pressure. If we get back above the $31 level, it could reignite bullish momentum. A move from $31 to $65, the high printed in March, would represent a 100% profit.

4. Daily chart of AVAX-USDT depicting buying pressure, resistance levels, potential breakout targets, and projected price movement trajectory towards higher levels.

Playbook

For holders of AVAX, many of whom are members, bidding around the buying pressure box, as shown on the charts, could be a strong play. The head and shoulders pattern is lining up nicely with the potential break of the $31 neckline, opening up further upside toward $65. Beyond that, a move to $100 is possible if market momentum continues.

Key levels

$31 (neckline resistance)
$65 (next target for 100% upside)
$100 (potential higher target if momentum persists)

Cryptonary's take

AVAX isn't an asset we're currently invested in, but it's shown significant strength this cycle and has a large, engaged community. The inverted head and shoulders pattern we're seeing aligns with the broader Total3 market cap's inverted head and shoulders, suggesting that alts, particularly the stronger ones, could be forming a bottom.

This also ties into the overall sentiment with the upcoming elections and Trump potentially leading the race, which could serve as a bullish catalyst going forward. If you're an AVAX holder, front-running the potential neckline break around $31 could be a good move in this current environment.