Avalanche: Investors who lack AVAX may be anticipating these levels

Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is the opinion of the author only

  • The avalanche seemed poised for another drop in the price charts
  • The bounce to $14 cannot be discounted but could present an opportunity for sellers

The avalanche reversed the market structure from bullish to bearish earlier this month after the recent market-wide selling pressure. Bitcoin crashed from $21.5000 to $16.2000 and it could drop again.

Read the 2023-24 Avalanche Price Forecast

The more aggressive traders in the lower time frame can try to bet on two bullish days. However, risk averse traders can wait for a short opportunity, with clear cancellations displayed on the charts. TVL of Avalanche has seen some progress lately, but could this be a short-term bullish catalyst for AVAX?

The market structure was bearish with sellers still aggressive

Source: AVAX / USDT on TradingView

On the 12-hour chart, AVAX broke below the ascending demand block at $14.5 on November 9. It reversed its structure from bullish to bearish on November 8 when the price broke below a recent higher low. Around the same time, the Relative Strength Index (RSI) declined as bearish momentum dominated the market.

Chaikin Money Flow (CMF) and On-Balance Volume (OBV) also took a big hit as selling pressure increased significantly. The bearish outlook has not changed yet. The Fibonacci retracement and extension levels showed the next support level to watch out for at $10.06. This was also an important psychological level.

For conservative higher time frame traders, a break down in the $15 region could be a place where they can look to enter short positions. Stronger traders in the area may see $14 as a place to enter short positions. In both scenarios, the conclusion was that AVAX would experience significant selling pressure near these levels. A cancellation would be to close the session above $14.06 for the more aggressive entry and above $16.01 for the conservative approach.

The funding rate is negative as the range participants invest at lower rates

A cascading avalanche on the charts, that's what the bulls need to turn things around

Source: feeling

Development activity has been picking up in recent days and that was the only positive thing long-term investors left out. Social Dominance has been fairly stable in recent months with sporadic increases to 0.7%.

As for the futures market, traders looked bearish as the funding rate fell into negative territory. Open interest has also been on a downward trend over the past two weeks.

Technical factors and general sentiment were strongly in favor of the Bears. This does not mean that a bounce towards $14 or even $15 will not happen. Alternatively, longer time frame traders can look for a retest of these areas to look for good probability shorting opportunities.

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