Analysis
Avalanche [AVAX] consolidates near key support; is an upswing likely?
Avalanche’s [AVAX] performance was dismal in the past few days. But there’s a recovery chance if BTC doesn’t drop significantly in the coming days.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- AVAX structure was bearish on the daily chart
- Sentiment in the futures market was bearish, too, at press time
Avalanche’s [AVAX] weekly and daily performance was unsatisfactory at the time of writing. The asset only increased marginally by 0.3% in the past week but declined by 2.1% in the past 24 hours, according to CoinMarketCap.
At press time, AVAX’s value was $17.05, flashed red but had lower candlestick wicks in the support zone (cyan) – highlighting bulls were keen on defending the support.
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However, the upcoming FOMC meeting on 2-3 May could expose Bitcoin [BTC] to fluctuations before steadying afterward. Similarly, AVAX will follow suit, and macro traders can track these key levels.
Will the bulls inflict a rebound?
Source: AVAX/USDT on TradingView
The bullish order block (cyan) of $16.44 has been a key support in April and late March. At press time, price action was below the short (50-EMA) and long (200-EMA) trends, reiterating sellers’ leverage.
However, AVAX’s pullback retested the support level alongside lower wicks which could suggest a potential uptrend. A confirmed uptrend continuation above $18.0 could set the AVAX/USDT pair to rally to the supply zone of $21- $22.
If that’s the case, an entry at $18 for a long position targeting $21 can offer a good risk ratio. However, obstacles lay at the dynamic 200-EMA ($18.87) and Fair Value Gap (FVG) zone of $19.5 – $20.2 (white). These obstacles could offer resistance to the likely upswing.
On the contrary, AVAX’s structure will weaken further if the $16.4 support cracks. A close below it could tip sellers to sink AVAX to $15.4 or March swing low of $14.
Meanwhile, the Relative Strength Index (RSI) has been fluctuating in the low range – highlighting buying and selling pressure was equal in the past few days, but sellers had a slight advantage. Similarly, the On-Balance Volume (OBV) was flat, showing demand stagnated in the same period.
More liquidations of long positions
Source: Coinglass
Read Avalanche’s [AVAX] Price Prediction 2023-24
According to Coinglass, over $172k worth of long positions were liquidated in a span of 12 hours. In the same period, only $25k worth of short positions were wrecked – showing bearish sentiment still looms large at press time.
The bearish sentiment was confirmed by the exchange long/short ratio. This showed that sellers dominated at 51.76%. Hence, AVAX’s structure will remain bearish unless the price exceeds $18. Investors should track BTC’s price action before making moves.
Source: Coinglass
