Avalanche flips $20 to support and bulls have their next target in sight
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Avalanche has performed well on the price charts over the past six weeks.
- A continuation of the strong uptrend was expected.
Avalanche [AVAX] retested an important Fibonacci retracement level and bounded higher on the price chart. This meant that bulls had the upper hand and that a move to $30 was next. Avalanche also saw a significant climb in its NFT sales volume.
The Dokyo collection recorded a volume exceeding $1.4 million and boosted Avalanche to the highest NFT sales volume in three months. Combined with the price action, confidence in the asset was high.
The Fibonacci extension levels presented a mouth-watering target for the bulls
Source: AVAX/USDT on TradingView
The $19-$20.7 zone was highlighted in green as it was a former resistance zone. In mid-November, it had been flipped to support, but some volatility within this zone was expected as the lower timeframes were likely to see moves in search of liquidity.
One such dip occurred on 21st November, but the drop was a retest of the 61.8% Fibonacci retracement level (pale yellow). Since then, AVAX has climbed above the $20 mark.
Therefore, from the price action on the one-day chart, traders have good reason to believe that a move to $24.6 was brewing.
The RSI has slowed down over the past two weeks, showing weakened bullish momentum. However, the market structure remained bullish. Moreover, the On-Balance Volume did not see a significant drop, which suggested selling volume was not dominant.
The liquidation levels showed the lands were relatively sparse of bears above $24
Source: Hyblock
AMBCrypto’s analysis of the liquidation levels heatmap showed that $18.7 and $23.1 were the next areas of interest.
They had the highest number of estimated liquidations, but given the recent price action, a dip to $18.7 was unlikely. Above the $23-$24 zone, estimated liquidations thinned out.
Read Avalanche’s [AVAX] Price Prediction 2023-24
Additionally, the $22 level has served as resistance since September 2022. Therefore, a move above these levels was a sign of strong bullish intent.
The next prominent resistance was at $30.8, with scant resistance levels of note between $24 and $30.
