AVAX may be facing a potential 19% price reversal – What should you know?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- AVAX’s price action over the past few weeks chalked a bearish rising wedge pattern
- Aggregated CVD spot declined, but the funding rate remained positive.
AVAX’s increasing price-volume divergence and weakening uptrend could impact investors in the near future. The altcoin’s overall price action from mid-March chalked a bearish rising wedge pattern, one which could tip the scale in favor of bears. This, especially if Bitcoin [BTC] breaks below its $26.8K – $28.8K range.
Read Avalanche [AVAX] Price Prediction 2023-24
Is a bearish breakout likely?
The $14-support stopped AVAX’s sharp depreciation in the second half of February. Later on, bulls registered some recovery. However, renewed efforts to reclaim the $21-price level could be undermined by the increasing price-volume divergence seen at press time. Additionally, the bearish rising wedge pattern could add more downward pressure and lead to likely retracement.
A possible retracement could set AVAX to drop to the previous support of $14 – A 19% potential drop based on the rising wedge’s height. However, the bearish breakout could face downward resistance at $16.47. Ergo, it may be worth watching out for.
A close above $19 will invalidate the aforementioned bearish thesis. Such an upswing could push AVAX to retest or break above the bearish order of $21, especially if BTC reclaims $29K.
Meanwhile, the RSI (Relative Strength Index) has predominantly oscillated between the equilibrium level and the 60-mark – Indicating almost equal buying and selling pressure over the past few days.
Conversely, the ADX (Average Directional Index) continued to drop, highlighting weak uptrend momentum for AVAX. In addition, the ADX’s decline could suggest a likely retracement or further consolidation.
CVD spot fell, but funding rates remain positive
According to Coinalyze, AVAX noted more long than short position liquidations in the past 24 hours, reiterating the underlying bearish sentiment at the time of writing. Also, the aggregated CVD (Cumulative Volume Delta) Spot dipped further – Evidence of the increasing influence of bears in the market. Together, these suggested a likely bearish breakout.
How much is 1,10,100 AVAXs worth today?
However, the funding rates have remained relatively positive over the last few days, highlighting the bullish sentiment in the Futures market. As such, investors should exercise caution and track BTC’s price action before making moves.