Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The lower timeframe momentum was strongly bearish.
- If $16.8 is breached by the sellers, it could signal an end to the rally of the past month.
Bitcoin fell to $21.4k in recent hours of trading. This miniature sell-off forced Avalanche to $17.78 to $17.08, and more losses could follow.
Well, the king coin still has some support extending to $21.2k, but a daily session close below $21.6k could start the next leg downward.
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If that happens, a large portion of the rally in January could see a retracement throughout February. Below $16.8, $15.8 and $14.2 are levels of support for AVAX. Whether the asset can bounce from $16.8 or fall lower is likely to depend on Bitcoin’s defense of the $21.6k area.
A higher low at $18.7 was broken, is $15.8 next?
Avalanche retraced southward in early February to fill the fair value gap it left, highlighted in white. It set a higher low and surged to reach the resistance at $22.42.
During this move upward, the RSI made lower highs while the price made higher highs. The bearish divergence played out in recent days and the price broke the market structure to bearish on lower timeframes.
A daily timeframe flip would occur on a session close below $16.8. However, trading volume has been falling in the past few days alongside the drop in prices. This suggested that selling pressure was not immense, and hinted at chances of a recovery upward.
How much are 1, 10, 100 AVAX worth?
While the RSI fell below neutral 50 to stand at 34, the OBV did not show such a sharp drop. Therefore the momentum was firmly bearish, but the volume sold wasn’t high enough to warrant the beginning of another downtrend.
OI continues to fall to highlight the bearish sentiment
In the 1-hour timeframe, data showed Open Interest has been falling steadily over the past few days. The fall on 9 February alongside sliding prices highlighted the bearish sentiment.
It did not highlight a large number of short positions being opened, as OI would increase alongside falling prices to denote strong bearish sentiment in that case.
The predicted funding rate also fell into negative territory a few hours ago. A continued slump in prices will see short positions encouraged. Long liquidations in recent hours also fed the selling pressure.
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