Cryptocurrency

Avalanche: On shorter timeframes, a move past this level could flip bias to bullish

Disclaimer: The findings of the next evaluation are the only opinions of the author and shouldn’t be thought of funding recommendation.

“Even after your favorite coin drops 90%, there is nothing that stops it from falling by yet another 90%”- nameless crypto analyst on Twitter. It is true that not a lot of religion ought to be put into issues mentioned on Twitter, particularly by nameless accounts. Yet, this adage has been true within the 2018 bear market, and can possible be true in this cycle as nicely. Avalanche has fallen by almost 76% for the reason that begin of May.

The humorous factor is that there’s nothing stopping the coin from shedding one other 40% in worth. Technical help ranges under $14.6 lie at $9.7 and $5.1. With Bitcoin barely holding on to the $20k mark, one other avalanche down the charts could be a possible situation.

AVAX- 1 Day Chart

Source: AVAX/USDT on TradingView

As talked about earlier, AVAX has long-term horizontal help ranges at $14.67 and $9.69. The earlier help at $23.22 held for almost a month, however the promoting stress was far too acute. Even on decrease timeframes, a bullish bias was nowhere to be seen. The $20 and $18.8 ranges had been performing as short-term resistance ranges.

The downtrend of AVAX started in late March. A rally from the $66.6 help level took AVAX as excessive as $103.2. In April and May, the sellers had management of the market, and AVAX has shed 84% since early April.

To flip the longer-term bias to bullish, AVAX would wish to climb past the $28 mark. In doing so, it might additionally want to maintain on to the $23 level as help.

On shorter timeframes, a move past $18.9 could flip the bias to bullish.

Rationale

Avalanche: AVAX could tumble lower on the price charts, even after a 76% drop in six weeks

Source: AVAX/USDT on TradingView

The every day RSI stood at 30.2 to present sturdy bearish momentum. It has been unable to climb above the 40 mark for almost two months now. A bullish divergence was not current both.

The OBV additionally slipped under a level that it had held on to since February. The falling OBV steered that promoting quantity was excessive, and the downtrend could proceed except the OBV can climb larger. The CMF has additionally been under -0.05 since April, with occasional forays to the zero mark. This signaled heavy capital stream out of the market.

Conclusion

Taken collectively, the indications confirmed sturdy bearish momentum and promoting stress. A pullback towards $20 or $28 was not but signaled. The market construction remained bearish as nicely. Hence, a session shut under $14.6 could supply a shorting alternative for Avalanche. At the identical time, a move to $20, mixed with a hidden bearish divergence, could additionally supply shorting alternatives.

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