AVAX finally broke out of a descending channel which lasted for nearly a month after September’s ATH. However, MACD’s bearish crossover and an overbought RSI signaled a premature end to AVAX’s price progression.
If so, expect AVAX to ease at a support zone between $61.7-$65.2, before gathering momentum for the next upcycle. At the time of writing, AVAX traded at $66.58, up by 2.6% over the last 24-hours.
AVAX 4-hour Chart
Source: AVAX/USD, TradingView
Constant selling pressure chipped away at AVAX’s value after an ATH of nearly $80 was breached in September. A descending channel, characterized by lower highs and lower lows, dragged AVAX by 37% from an ATH to the lowest point of the pattern.
In turn, a steady response from $54.4 allowed bulls to mount a comeback and finally enforce an upwards breakout from the pattern. The last five days have now accounted for a 27% surge, with bulls solidifying AVAX above the 50% Fibonacci Retracement level.
Overbought readings on the RSI coupled with early signs of a bearish crossover along the MACD suggested a period of correction before the next leg forward. The 50% and 38.2% Golden Fibonacci Retracement zone would offer near-term support as selling pressure begins to creep into the market.
From here, a close below Visible Range’s POC of $60 (not shown) could culminate into some unpleasant losses. Such an outcome could see AVAX shift back within its pattern and target a newer low around the $44-mark. However, the Directional Movement Index’s heavy bullish-bias laid waste to such a drastic decline.
ConclusionÂ
After recording sharp gains in the past couple of days, AVAX could cool down between the 50% and 38.2% Fibonacci Retracement levels before the next hike. Bearish signs on the MACD and an overbought RSI heightened chances of an incoming pullback. Meanwhile, bulls must maintain AVAX above $60 to preserve an overall bullish outlook.
