Avalanche [AVAX] falls below $16: sellers look to extend gains here
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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- AVAX structure remained bearish on the 12-hour chart.
- Longs recorded significant losses.
Avalanche [AVAX] continued its push for newer lows with the coin posting 9.7% losses over the past seven days. This has seen AVAX fall by 36% from its YTD high.
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Bitcoin’s [BTC] dip under $27k presented more shorting opportunities for AVAX bears. However, a bullish reversal could be around the corner.
Will the $13.98 support level halt the drop?
AVAX structure flipped bearish from 18 April after it recorded three significant bearish candles in a row on the daily timeframe. Sellers have maximized this advantage, breaking through support levels at $20, $18, and $16 price zones.
A look at on-chart indicators highlighted the bearish dominance. Price remained under the 50 SMA and 200 SMA with the OBV declining to show a lack of bullish traction. The RSI has been under the neutral 50 mark for the past seven days and it stood at 33, as of press time.
Conversely, further bearish activity by Bitcoin [BTC] could see bears cover more ground with the $14 support level a near-term target.
However, bulls have an outside chance of stopping the bearish swing. The $14 support level held firm in mid-March. It also served as the base for the bullish rally that saw AVAX hit the $21 price zone. If bears push the price to this support level, bulls will be hoping for a similar rally to halt the selling pressure.
Read Avalanche’s [AVAX] Price Prediction 2023-24
Longs rekt massively
A look at the seven-day liquidation data from Coinglass showed longs taking a beating in the futures market. $1.68M long positions were rekt as against just $132k short positions. This showed market sentiment titled heavily towards the bears.
The bearish sentiment was confirmed by the long/short ratio. This saw sellers dominate by 51.7%. Hence, AVAX’s structure will remain bearish unless bulls force a reversal from the $14 level.