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Avalanche set to tumble southward as the downtrend persists

2min Read

The daily and 4-hour price charts of Avalanche showed the bears were highly likely to drive prices lower, especially after the move below $13.88 on 5 June.

Avalanche set to tumble southward as the downtrend persists

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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.

  • The higher timeframe charts showed that the mid-April rally failed to break key highs.
  • This was followed by a downtrend in May, but the $13.8 area posed some opposition to the sellers.

Avalanche had a bearish bias on the price charts. It is the fifth largest blockchain in terms of TVL but its DeFi activity stagnated in recent months. In other news, SushiSwap announced the launch of their v3 suite of products on Avalanche.

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

The price action presented short sellers with an opportunity. The structure was bearish, but the volatility has been high over the past 48 hours despite seller dominance. If the prices fall beneath $13.5, it would represent a continuation of the downtrend.

The Fibonacci levels showed where bears can look to enter a trade

Avalanche set to tumble southward as the downtrend persists

Source: AVAX/USDT on TradingView

The market structure was bearish on the daily timeframe, and a downtrend was in progress. The 4-hour chart also showed a downtrend in progress. In May, the price formed a series of lower highs and lower lows.

The $13.88 level served as support, but AVAX still formed a low at $13.71 on 25 May. On 5 June, the price fell to $13.48, showing that bears remained dominant. Despite the bounce to $14.6 on 7 June, the market structure remained bearish.

Monday’s move was used to plot a set of Fibonacci retracement levels (pale yellow). It showed the 78.6% retracement level at $14.62, which explained the inability of the bulls to drive prices higher. Having established the bearish character of the market, a short trade can be entered upon a retest of the 50% retracement level at $14.21.

The 23.6% and 61.8% Fibonacci extension levels at $13.14 and $12.58 can be used to book profits. A move by AVAX above $14.93 would invalidate this idea as it represents a key short-term lower high.

The spot CVD remained flat to note indifference from buyers

Avalanche set to tumble southward as the downtrend persists

Source: Coinalyze

It has been noted that the prices bounced to the $14.62 level on Wednesday. Despite that, the spot CVD continued to decline. Over the past 24 hours, the metric was flat, this showed buyers were in the minority and selling pressure was overwhelming.

Is your portfolio green? Check the Avalanche Profit Calculator

The Open Interest picked up a little, amounting to close to $10 million. However, when AVAX faced rejection at $14.6, the open interest dropped further. This development hinted at discouraged bulls. Overall, the bearish sentiment was prevalent both on the low and high timeframes.


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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