Avalanche climbs toward resistance, is a reversal underway?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Avalanche continued to trend downward on the 1-day timeframe price chart.
- The rally could extend higher to collect liquidity before a reversal.
Avalanche [AVAX] was at an interesting place on the daily price chart. The market structure and trend of the price action were bearish. Yet, the lower timeframe outlook was bullish. However, it was unlikely that demand was strong enough to breach an imminent zone of resistance.
Read Avalanche’s [AVAX] Price Prediction 2023-24
Increasing Bitcoin [BTC] prices saw an increased demand for the wrapped version of BTC on the Avalanche network. The active user base also saw a massive increase in the monthly chart, as dApps saw a surge in usage. Interest in NFTs was also on the rise.
The 1-day bearish order block presents a stiff resistance zone for AVAX bullsThe market structure of AVAX was bearish on the 1-day chart. A move past the recent lower high at $15.06 would be required to shift the structure to bullish. Even in that scenario, it would highlight bullish intent and not necessarily an uptrend.
Because AVAX has formed multiple lower highs and lower lows in the past two months, the price was in a firm downtrend. To the north, the $13.88-$14.67 area represented a bearish order block.
It was likely that a retest of this zone would provide a strong bearish reaction. Alternatively, Avalanche token prices could surge momentarily to the $15-$15.1 region to catch breakout bulls offside before a reversal.
The RSI flipped the neutral 50 level to support to show bullish momentum, but the OBV could not climb to the late May highs. This showed that the move upward was not backed by heavy demand for the asset.
Downturn in development not yet a cause for concern for investors
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The past three weeks saw the development activity trend upward, but June 19 saw it drop steeply. Yet, the dev activity has a habit of seeing sharp fluctuation, but overall has trended higher in 2023.
However, the weighted sentiment was negative behind the token despite increased usage. Avalanche funding rate had fallen deep into the bears’ territory during the plunge to $11. At the time of writing, it was positive once more.