AVAX Navigating a Complex Zig-Zag Pattern Across Multiple Timeframes

Avalanche (AVAX) is displaying a fascinating multi-layered zig-zag correction structure on higher timeframes, with deeper fractal patterns emerging as we zoom into shorter intervals. The current price action at $10.47 (down 4.14% recently) is a critical moment for traders monitoring these technical developments. This analysis examines how the zig-zag formation unfolds across different timeframe perspectives and identifies key support levels that could influence the next directional move.

Understanding the Triple Zig-Zag Correction Structure

The primary observation centers on a triple zig-zag correction taking shape on elevated timeframes. This multi-wave structure suggests AVAX is consolidating within defined boundaries rather than making a decisive directional break. The 1.272 Fibonacci pocket currently serves as the first line of defense, providing potential support that could catalyze a reversal. However, the 1.618 ratio (derived from Wave “W” × 0.618) emerges as the more favored confluence zone above the 1.272 level, attracting buyers who trade higher-probability setups.

Notably, close examination of lower timeframe charts reveals smaller fractal iterations of this same zig-zag structure—a self-similar pattern suggesting that the correction is operating across multiple degrees simultaneously. This fractal nature is important because it confirms the overall structural integrity of the formation and provides additional confluence for potential turning points.

8-Hour Chart Analysis and Price Support Levels

On the 8-hour timeframe, the picture becomes clearer. An ABC correction has finished its formation, after which price action turned decisively downward, signaling that the dominant downtrend has reasserted itself. The current position sits within the Golden Window—the 0.618 to 0.786 Fibonacci retracement zone of Wave B—an area characterized by concentrated liquidity and heightened volatility.

This positioning raises an important tactical question: Is price trading through a shake-out reversal pattern that will ultimately flip the bias higher, or are we witnessing a continuation pattern that drives further downside? The density of liquidity in this zone typically attracts both aggressive sellers looking to break support and buyers anticipating a bounce. The resolution of this ambiguity will likely come from observing how price responds to the technical levels ahead.

1-Hour Chart Dynamics and Wave Confirmation

The 1-hour chart provides the highest resolution view and reveals even more granular wave structure. An exotic expanded running flat pattern was formed, which potentially marks Wave 2 or B of a higher-degree structure. Following this corrective phase came a powerful 5-wave impulse to the downside, featuring a truncated 5th wave, followed by an ABC rally to the upside.

The current configuration suggests we may be positioned within the middle stages of a zig-zag correction, awaiting confirmation of Wave 2 of what could develop into a five-wave impulse move lower. An invalidation of this outlook would occur if price climbs above $12.49; breaching this level would imply the higher-timeframe triple zig-zag may have already completed at the 1.272 extension of Wave “W.”

Key Price Levels and Reversal Scenarios

If downside pressure continues to build, the 1.618 Fibonacci extension of Wave A represents a common retracement target. The 1.272 ratio on the 1-hour chart also qualifies as a potential support zone, though it carries lower statistical probability than the 1.618 extension. Traders should note that convergence of multiple support levels typically increases the odds of meaningful reversals.

The multi-timeframe zig-zag structure AVAX is tracing out creates a layered risk-management framework—each fractal level provides both an opportunity to enter corrective positions and a reference point for stop-loss placement. Monitoring price behavior at these confluence zones will be essential for determining whether the zig-zag correction is nearing completion or has further to run.

Disclaimer: This analysis is intended for educational purposes only and should not be construed as financial advice.