Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Following a 4-week long down-channel that lasted between September to October, Avalanche continued to hunt aggressively for newer price levels in November. The past week has now accounted for two rallies, with a new ATH set above $81.
While AVAX aims to maintain its progress heading into December, its price could take a near-term hit before the next upcycle. This stemmed from overbought readings on the RSI and a possible bearish twin peak on the Awesome Oscillator.
At the time of writing, AVAX was trading at $83.5, up by 9.4% over the last 24 hours.
AVAX 4-hour Chart
Source: AVAX/USD, TradingView
AVAX’s strong start to November has set its price on course towards $100. A 35% pickup from $60 pumped AVAX to fresher records and an 11% correction followed thereafter. The Fibonacci Extension tool was plotted along this rally to identify certain near-term targets.
Now that AVAX has tagged the 61.8% Fibonacci Extension level, an overbought RSI and a potential bearish twin peak on the Awesome Oscillator could trigger the next round of corrections.
In case AVAX fails to register a decisive close above $85, bearish pressure could drag the price back towards the 38.2% Fibonacci level over the coming sessions. Should a deeper correction take place around the $73.6 support, a double bottom could provide an impetus for the next wave upwards.
Reasoning
Now, AVAX’s 4-hour RSI spotted a bearish divergence along with overbought readings, throwing weight behind a possible drawdown.
Should Awesome Oscillator’s current peak fail to best its previous monthly milestone, a bearish twin peak would also come to light. While such signals would invite selling pressure, the overall uptrend was preserved on the Directional Movement Index which was yet to deter from its bullish position.
Conclusion
Before AVAX tests its 100% Fibonacci Extension and paves way towards $100, a near-term correction should be on the cards. Hence, the focus will be on support regions of $80 and $73.3 going forward.
