Back to March lows for AVAX as U.S Debt talks continue

Dis­claimer: The infor­ma­tion pre­sent­ed does not con­sti­tute finan­cial, invest­ment, trad­ing, or oth­er types of advice and is sole­ly the writer’s opinion.

• The U.S. debt talks are expect­ed to con­tin­ue into the weekend.
• Exchanges long/short ratio was neu­tral despite AVAX retest­ing March lows.

The U.S. debt talks have over­shad­owed the mar­kets for a while, giv­ing bears an edge. Sell­ers fur­ther con­sol­i­dat­ed their hold fol­low­ing the FOMC min­utes on 24 May. Inter­est­ing­ly, Avalanche [AVAX] bears man­aged to retest March swing low of $13.88. 

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In the mean­time, Bit­coin [BTC] breached below the $26.6k area as sell­ing pres­sure inten­si­fied. With spec­u­la­tion that the U.S. debt talks could extend into Memo­r­i­al Day week­end, there is like­ly volatil­i­ty in the next few hours/days. 

Will sellers push lower, or will bulls gain ground?

Source: AVAX/USDT on TradingView

The 12-hour chart’s RSI has been dom­i­nant­ly below the neu­tral lev­el of 50 since the sec­ond half of April, high­light­ing height­ened sell­ing pres­sure in the same peri­od. For CMF, there have been fluc­tu­a­tions between neg­a­tive and pos­i­tive zones, show­ing cap­i­tal inflows wavered. 

The over­whelm­ing sell­ing pres­sure saw AVAX drop sharply from the sup­ply zone (red), near $21 – $22, to March swing lows of $13.88 as of press time. The under­ly­ing bear­ish pres­sure and weak BTC could tip the scale fur­ther in favor of bears. 

As such, sell­ers could extend gains beyond March swing lows. The next sup­port lev­els are at $13.43, $12.81 and $12.07. These could act as short-sell­ing targets. 

How­ev­er, if BTC reclaims the $26.6k lev­el, AVAX bulls could gain lit­tle lever­age. They could attempt to clear the $14.41 hur­dle and ral­ly to $51.19. A move above this lev­el could tip AVAX to retest the $16.3 level. 

OI is yet to recover to mid-April levels

Source: Coin­glass

Read Avalanche’s [AVAX] Price Pre­dic­tion 2023–24

In mid-April, AVAX’s open inter­est (OI) rates rose above $160 mil­lion, push­ing the price to $20. How­ev­er, OI fluc­tu­at­ed in May, tank­ing sig­nif­i­cant­ly around halfway into the month before attempt­ing recovery.

But the OI is yet to recov­er mid-April’s lev­el, fur­ther con­firm­ing the bear­ish pressure. 

Regard­less, AVAX’s exchange long/short ratio showed very lit­tle spread between long and short posi­tions in the 12-hour time­frame. As such, the price could go in either direc­tion and track­ing BTC’s move­ment could offer more clarity.

Source: Coin­glass