Sloppy price action, declining volume: What’s next for AVAX?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- AVAX stalled at key price zone, as lack of trading volume limited its price action.
- Market sentiment was heavily bearish.
The dwindling volumes of Avalanche [AVAX] has caused the altcoin’s price action to stall at a key price level. This came after the bullish push off the $11 support level hit a major hurdle at the $15.8 resistance level. The price rejection at the resistance level maintained AVAX’s bearish market structure.
Read Avalanche’s [AVAX] Price Prediction 2023-24
Meanwhile, Bitcoin [BTC] rallied strongly over the past 24 hours to reach $30k before retracing to trade at $29.5k, as of press time.
Stalling price action evidenced by contracting Bollinger Bands
While AVAX’s market structure has been largely bearish, bulls have unsuccessfully tried to rally. The price reversal by bulls has been hampered by declining volumes which has led to lower prices.
The 12-hour chart showed a tightening of the Bollinger Bands which hinted at a strong upward/downward price move for AVAX. However, neither buyers nor sellers seemed to have the upper hand with indicators flashing mixed signals.
Although the Relative Strength Index (RSI) remained under the neutral 50, the Moving Average Convergence Divergence (MACD) posted a bullish crossover, albeit a weak one. A shining light for bulls was the Chaikin Money Flow (CMF) flipping positive with a reading of +0.05, highlighting growing capital inflows.
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With a previous price report highlighting the possibility of bulls rallying from the 61.8% Fib ($12.30) or 78.6% Fib ($11.29), these could be critical price points for buyers. Alternatively, sellers could maintain the bearish downtrend with the $11 support level a near-term target.
Short-term market sentiment was heavily bearish
The exchange long/short ratio on the four-hour timeframe leaned strongly in favor of sellers. Data from Coinglass showed that 56.5% of open contracts were short positions. This hinted at sellers primed to continue AVAX’s bearish market structure for more gains.