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

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

“Even after your favorite coin drops 90%, there is noth­ing that stops it from falling by yet anoth­er 90%”- anony­mous cryp­to ana­lyst on Twit­ter. It is true that not a lot of faith should be put into things said on Twit­ter, espe­cial­ly by anony­mous accounts. Yet, this adage has been true in the 2018 bear mar­ket, and will like­ly be true in this cycle as well. Avalanche has fall­en by near­ly 76% since the start of May.

The fun­ny thing is that there is noth­ing stop­ping the coin from shed­ding anoth­er 40% in val­ue. Tech­ni­cal sup­port lev­els below $14.6 lie at $9.7 and $5.1. With Bit­coin bare­ly hold­ing on to the $20k mark, anoth­er avalanche down the charts could be a like­ly scenario.

AVAX- 1 Day Chart

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

Source: AVAX/USDT on TradingView

As men­tioned ear­li­er, AVAX has long-term hor­i­zon­tal sup­port lev­els at $14.67 and $9.69. The pre­vi­ous sup­port at $23.22 held for near­ly a month, but the sell­ing pres­sure was far too acute. Even on low­er time­frames, a bull­ish bias was nowhere to be seen. The $20 and $18.8 lev­els were act­ing as short-term resis­tance levels.

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

To flip the longer-term bias to bull­ish, AVAX would need to climb past the $28 mark. In doing so, it would also need to hold on to the $23 lev­el as support.

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 dai­ly RSI stood at 30.2 to show strong bear­ish momen­tum. It has been unable to climb above the 40 mark for near­ly two months now. A bull­ish diver­gence was not present either.

The OBV also slipped below a lev­el that it had held on to since Feb­ru­ary. The falling OBV sug­gest­ed that sell­ing vol­ume was high, and the down­trend could con­tin­ue unless the OBV can climb high­er. The CMF has also been below ‑0.05 since April, with occa­sion­al for­ays to the zero mark. This sig­naled heavy cap­i­tal flow out of the market.

Conclusion

Tak­en togeth­er, the indi­ca­tors showed strong bear­ish momen­tum and sell­ing pres­sure. A pull­back toward $20 or $28 was not yet sig­naled. The mar­ket struc­ture remained bear­ish as well. Hence, a ses­sion close below $14.6 could offer a short­ing oppor­tu­ni­ty for Avalanche. At the same time, a move to $20, com­bined with a hid­den bear­ish diver­gence, could also offer short­ing opportunities.

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