Analysis
Avalanche [AVAX] reaches a zone of resistance but buyers can benefit here
Posted:
Journalist
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Avalanche has been bearish in the month of May, but AVAX was able to flip the $24.14 level from resistance to support over the weekend. Moreover, Avalanche continued to push higher toward $28 as demand seeped into the market.
Bitcoin burst out of the $28.7k-$30.6k range the previous day to trade at $31.7k. To the north, significant resistance lies at the $32.6k mark and the $35k area. It seemed possible that, after two weeks of consolidation at the $30k mark, Bitcoin would push higher toward the $36k-$38k region.
AVAX- 2 Hour Chart
Source: AVAX/USDT on TradingView
On 12 May, the price dipped to $23.51 and was able to bounce as high as $36.8. However, over the past two weeks, the price continued to descend steadily and fell beneath the $24.14 support.
However, over the weekend, Bitcoin bulls were able to fight back from the range lows after dipping to $28.3k, and Avalanche was rising on the price charts alongside the king of crypto. AVAX flipped $24.14 to support, and at press time as trading within the $28 area of resistance (red box).
This zone acted as support the previous week, and if AVAX can climb past this region and establish it as support, another push higher toward $36 can be anticipated for AVAX.
Rationale
Source: AVAX/USDT on TradingView
The RSI was able to climb back above the neutral 50 line to show that momentum has a bullish bias once more. It was able to stay above 60 for a couple of days as well, which meant that momentum had been strong.
The OBV has also risen in the past few days. The two orange lines are levels that buyers want to see broken on the lower timeframes on the OBV. This would indicate good buying pressure and steady demand behind a push upward for AVAX.
Conclusion
The higher timeframe trend for AVAX, such as D1, remained bearish. However, the coin still had a lot of room to the upside before a potential continuation of the higher timeframe downtrend.
On the lower timeframes, the bias has been flipped to bullish. A move above $28 and a retest as support can be used to enter long positions targeting $32.6 and the $35-$36 resistance.
