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Analysis

Avalanche offers a buying opportunity at $14.5, here’s why you should take it

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The price action of Avalanche was strongly bullish and a move higher was likely over the next week.
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Avalanche offers a buying opportunity at $14.5, here's why you should take it
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • Avalanche has trended upward in the past three weeks and established a bullish structure even on the 1-day timeframe.
  • The $14 area represented a strong resistance zone and the breakout was a positive sign.

Avalanche [AVAX] surged to $15.97 on Friday, 14 July, registering gains of 32% measured from 21 June, when the AVAX price action took a bullish turn on the 1-day chart. The price action continued to favor the bulls.

Read Avalanche’s [AVAX] Price Prediction 2023-24

News of Uniswap [UNI] expanding into the AVAX network helped explain the strong rally that Avalanche saw last week. After the breakout past the $14.5 zone and the subsequent retest, it was likely that AVAX would continue to move higher.

The bullish structure and trend meant a move to $16 and higher was possible

Avalanche [AVAX] presents a buying opportunity after the breakout past $14.5

Source: AVAX/USDT on TradingView

The OBV showed that the past few days saw enormous buying volume in the Avalanche market that catapulted priced above the $14.5 resistance zone. This area, highlighted by the red box, was a bearish order block on the 1-day timeframe from 6 June.

It was previously tested as resistance on 9 July, and AVAX met a brief rejection to fall to $12.85 before rallying once again. Based on this move, a set of Fibonacci retracement levels were plotted. It showed the 50% and 61.8% retracement levels sat at $14.41 and $14.04 respectively.

Hence these are the two levels traders can look to bid AVAX at, targeting a move to the local highs at $16 and a 23.6% extension at $16.71. Invalidation of this idea would be a drop below the 78.6% retracement level at $13.52.

The RSI and the moving averages showed bullish momentum. The H4 market structure was also bullish. But a drop below the higher low at $14.04 would shift the bias toward the bearish side.

The Open Interest started to decline after the short-term AVAX rejection from $15

Avalanche [AVAX] presents a buying opportunity after the breakout past $14.5

Source: Coinalyze

The 1-hour chart showed that the OI was on a strong upward trajectory alongside the prices on 15 July. However, the conviction of the buyers began to weaken as the price began to slump following a move to the $15.35 mark.

Is your portfolio green? Check the Avalanche Profit Calculator

This need not dissuade swing traders as it was the weekend. And volume was low and the market might not be ready for a breakout. The declining spot CVD over the past two days was also a concern for short-term bulls. It was at odds with the OBV, which saw only a minor pullback and showed bullish dominance overall.

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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