Avalanche: Should AVAX investors continue to play the waiting game

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Since back-pedaling from its April highs, Avalanche (AVAX) registered a substantial spike in the selling vigor. The liquidations from the $95-zone pulled AVAX below its six-month trendline resistance (white, dashed).

Track live crypto price of 10000+ coins!

The current market dynamics exhibited a visible selling edge. So, the traders/investors must be wary before pacing long bets. As AVAX approaches the apex of the short symmetrical triangle (white), a lack of buying pressure could propel a short-term setback. At press time, AVAX traded at $24.87, up by 1.61% in the last 24 hours.

AVAX Daily Chart

Source: TradingView, AVAX/USDT

AVAX was down by more than 85% of its value as it plunged towards its nine-month low on 27 May. Then, after bouncing back from the seven-month trendline support (yellow, dashed), the altcoin chalked out a short symmetrical triangle. 

The recent bearish engulfing candlesticks noted more volumes than the buy orders and thus depicted a bearish edge.

After the 20 EMA (red) jumped below the 50 EMA (cyan), the gap between them kept rising over the last few days. This reading revealed a bearish edge in the ongoing market structure. Any close below the pattern and the $23-support could expose AVAX to a 10% downside in the $20-$21 range.

Related:  Coinbase rolls out plans for users on Ethereum Merge

However, such an over-extended gap between the 20/50 EMA has historically provoked buying comebacks. For this, the buyers still needed to find a close above the six-month trendline resistance and the 20 EMA.


Source: TradingView, AVAX/USDT

The Relative Strength Index has been struggling to break above the 39-mark for over a month now. Its current readings blended well with the bearish outlook.

Although Aroon up (yellow) undertook a northbound trajectory, investors/traders must look for a close above the 70%-mark before placing long bets. Finally, the bullish divergence on the OBV can extend the squeeze in the current zone.  


Should the bears capitalize on the current sentiment, a close below the pattern would open doorways for a $20-$21 range retest. The buyers still need to propel an uptick in buying volumes to invalidate the likely bearish outcomes.

At last, the investors/traders must keep a close watch on Bitcoin’s movement. This reading would be vital to complement these technical factors.

Download MAXBIT Android App, Your best source of all crypto news!

Google Play

Source link

Share this article: