Avalanche sellers have remained alert to halt any buying rally since the altcoin touched its November all-time high. Meanwhile, liquidations from the latest symmetrical triangle dragged the altcoin beneath its 7-month trend-line resistance.
The prevailing formation shows bearishness as AVAX thrived for a 20 Exponential Moving Average retest. Therefore, market players should remain alert before executing long bets on Avalanche. Buying momentum in the coming few candles would primarily affect the token’s trajectory. Meanwhile, buyers joining around the nearest support might mean a constricted phase for AVAX before its extended fall. While publishing this content, AVAX changed hands near $16.25, gaining 4.45% within the past 24 hours.
Avalanche Daily Timeframe
Avalanche lost over 88% since its all-time high, plummeting towards 10-month lows on June 15. The closest trend-line resistance presented dependable support for months before the symmetrical triangle breach fueled bearishness for the alt. The triangle breakdown recorded intensified selling strength than the current buy orders, thus confirming bears’ dominance.
Buyers would remain vigilant for bounce-back opportunities around the $16 foothold as price movements near the Bollinger Bands’ lower limit. Such developments might see Avalanche inside a squeeze in the upcoming sessions.
A decisive closing under the support of $16 would welcome shorting opportunities, targeting $13.5 – $14.5. Nevertheless, traders should evaluate macroeconomic factors’ implications on the crypto market sentiment.
Reasoning
The Relative Strength Index dropped inside the oversold territory after struggling to overcome the resistance at 39. A closing beneath 30 might see the indicator retesting the support at 26. Meanwhile, the bearish divergence between AVAX prices and the Chaikin Money Flow propelled sellers to secure renewed momentum.
Final Thought
Considering oversold conditions on the Relative Strength Index and the Bollinger Bands, buyers should protect the nearest support. Meanwhile, a significant closing beneath $16 might see Avalanche on stretched downtrends to explore the $13 – $14.
Lastly, investors should watch BTC’s actions to complement the technical factors. Bitcoin remains in bearish hands at the moment. While publishing this blog, the bellwether crypto changed hands near $20,870, losing 4.27% within the past day. Such an outlook confirms Avalanche’s weakness and possibilities of further plunges.
Editorial credit: Dennis Diatel / Shutterstock.com
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