AVAX price prediction – How important is $9 support as sidelined traders refuse to chase news?
The psychological round-number support at $9 is a key short-term demand zone for Avalanche.
On Tuesday, 19 May, global digital assets company Animoca Brands announced a partnership with Ava Labs. The announcement revealed a strategic investment in the Avalanche [AVAX] ecosystem, as well as “advisory and business development support.”
The collaboration aims to use the network’s scalable infrastructure to strengthen its position as a platform for real-world blockchain adoption.
AVAX fell from $9.38 to $9.02 on Tuesday, a drop of just over 3%. Since then, the token has bounced by another 4% from the $9 round-number support to challenge the $9.40 short-term resistance once again.
The long-term AVAX trend
Since the February crash, the altcoin has managed to stay afloat above the $8.32-support level. And yet, it was unable to scale the $10.34 high set in early February. AVAX bulls tried and failed to break this resistance in March and May.
The latest rejection was halted at the $9-support level. The volume profile tool highlighted the $9.28-level as the Point of Control (red), with the Volume Area High and Low at $8.87 and $9.75, respectively.
The VAH has acted as resistance since mid-March and last week, briefly served as support. The sellers quickly overwhelmed this level, but the price action and volume profile tools highlighted $9.0 and $9.75 as the key horizontal levels nearby that traders need to keep an eye on.
Examining the 1-day timeframe’s structure, AVAX was rangebound and lacked a clear trend. Moreover, its average trading volume has trended downwards in the last three weeks, signaling that more participants preferred to remain sidelined.
Traders’ call to action – Expect a bounce
Finally, the Money Flow Index seemed to be reaching local peaks even though AVAX only mustered a paltry bounce from the $9-level. This was a concern for the bulls and threatened a breakdown.
And yet, as things stand, the psychological support level at $9 is important in the short term. Each revisit to this level brings a buying opportunity, although traders must remember to take profits during the bounce toward $9.75 and $10.
Final Summary
- Avalanche’s volume profile tool highlighted large volume nodes that can act as support and resistance.
- Traders can expect a positive reaction from the $9-support level, but should consider taking profits during a bounce to $9.75 and $10.3.
