Disclaimer: The information presented does not constitute financial, investment, trading or other types of advice and is the opinion of the author only
- AVAX retested $11.94 four times without success
- AVAX bears had more leverage and managed to push the price to $11.17
Avalanche [AVAX] It has been in a downtrend since August 2022. It also drew a falling wedge pattern in the latest price action. Although, falling wedge patterns are usually bullish and may represent a trend reversal. But AVAX still faces significant hurdles.
Read Avalanches [AVAX] Price forecast 2023-2024
At the time of publication, AVAX was trading at $11.79, with a red flash, indicating that the bears have a slight advantage. It is necessary for AVAX to break below $11,947 after that bitcoin [BTC] It fell below the $16,900 level. Its sensitivity to BTC’s performance was worth watching for the asset’s next price move.
If the AVAX bulls fail to break above $11.79, the bears may push the price to $11.17 or lower.
The $11.94 barrier: Can the bulls overcome it?
The immediate barrier of $11.94 has been retested four times in the past four days. Conventional wisdom in trading says that the more a resistance level is retested, the greater the possibility of a breakout.
However, the technical indicators indicated that bears have the upper hand in the market and could render the above conventional wisdom irrelevant to the current market scenario.
In particular, the Relative Strength Index (RSI) was at 38, with a weak slope indicating oversold territory after the recent rally. This showed an increase in buying pressure recently but met stiff resistance from sellers.
In addition, the Directional Movement Index (DMI) showed that the red line (sellers), at 30.90, was well above the green line (buyers), 16.65, and the 25-unit leverage mark. This indicates that sellers had more influence in the market than buyers at the time of publication.
Therefore, selling pressure may increase in the medium term, pushing AVAX price to $11.39 or $11.17 or below. As such, these levels could act as short selling targets with the stop loss just above the current resistance at $11.94.
A break above the $11.94 resistance will invalidate the bearish outlook, especially if BTC is bullish. Such an upward move would shift AVAX’s focus towards the 20-period moving average (MA) target of $12.96.
Investors were pessimistic about AVAX despite the demand in the derivatives market
AVAX investors remain bearish on the asset as weighted sentiment has slipped deeper into negative territory. Additionally, AVAX has noted a recent decline in development activity that has coincided with a drop in prices. Could the recent uptick in development activity drive up the price?
The recent uptick in development activity is consistent with increased demand for AVAX in the derivatives market. However, demand is down slightly at the time of publication.
How many AVAX can you get for one dollar?
Demand in the derivatives market with negative sentiment is painting a mixed signal. Investors can get more reliable clarity if they add BTC performance to their watchlist.