Disclaimer: The results of the analysis below are the author’s sole opinion and should not be considered investment advice.
Like most altcoins, Avalanche (AVAX) has pointed out that its value has dropped significantly over the past month. Sold out from the 6-month trendline resistance (white, dashed line) isolated the descending wedge (white) in the daily time frame.
Trading against a bearish market structure may not be a profitable choice. However, investors need to be aware that they are well above the current pattern in order to get the expected short-term profits. At the time of the press, AVAX was trading at $ 34.17, up 15.21% in the last 24 hours.
AVAX Daily Chart
AVAX has lost more than 84% of its value since reaching a lifetime milestone, plunging to a nine-month low on May 12. On the way up from there, alt tested the upper trendline of the down wedge. The bullish hammer on the daily chart pushed this revival up from the $ 30.2 level.
AVAX can see the bird’s eye and has always found fresh lows alongside low peaks since ATH. As a result, 20 EMA (red) was below 50 EMA (cyan), but the gap between them has continued to widen over the past few days. This reading reveals a clear advantage for sellers in the ongoing market structure. That said, prolonged gap growth can also affirm an overly widening situation. Therefore, it will lead to the possibility of resurrection in the next few days.
Just above the pattern, AVAX is exposed to short-term profits and will test in the $ 41- $ 42 range. Due to the relatively small purchases, it seems unlikely that a profitable Bull Run is likely at this time. On the downside, the $ 30 level is essential to prevent the Bulls from falling further to the 23rd floor.
The rationale
Source: TradingView, AVAX / USDT
The Relative Strength Index has dropped strongly from 44 levels of resistance. Despite multiple attempts, the Bulls are struggling to weaken the 30-mark bond.
MACD and Signalline are on the verge of a bullish crossover for nearly six weeks. Therefore, it reveals the visible sales benefits in the current market. Historically, these lines have recovered after plunging below -10 levels. Therefore, the Bulls aim to further ease future selling pressure.
Conclusion
If the Bulls take advantage of the current descent wedge setting, just above the pattern will open a doorway for retesting in the $ 41- $ 42 range. However, buyers still need to drive increased buying volumes to counter steady selling pressure.
Last but not least, investors / traders need to closely monitor Bitcoin’s movements. This reading will give you a better understanding of the overall market structure and dynamics to complement these technical factors.
