With the bearish reversal from the psychological barrier at $100, Avalanche(AVAX) prices declined by 25% and cracked beneath the support of 200 DMA. Although the increasing selling pressure is evident with the growing trading volume during the bearish retracement, the possibility of the trend sustaining below the 200-day DMA increases. So, will the bears break the trendline, or a bullish reversal is destined?
Key points:
- The daily-RSI slope is approaching the oversold region
- The intraday trading volume in the AVAX is $999 Billion, indicating a 128% gain
Source- Tradingview
The AVAX/USDT pair on Binance shows a bearish rally in motion that has brought a 25% discount in the last ten days, resulting in multiple bearish engulfing candles. The retracement comes after facing higher price rejection at $100 and currently stands at $75.
The downfall comes within the rising wedge pattern observed in the daily chart as the downtrend approaches the support trendline. However, the increased trend momentum with a 100% jump in trading volume projects a high possibility of bearish fallout.
The probability of AVAX price sustaining above the support trendline decreases as the momentum-packed rally cracks the $75 level. Hence, traders can expect the fallout trend to reach the $61 mark, accounting for an almost 20% fall.
Considering the unlikely event of a bullish reversal, an upside move back to the $100 mark is possible.
Technical indicator
EMAs- The coin price breached the shared support of $78.4 and the 200-day EMA, encouraging further selling. Moreover, the 20-and-50-day EMAs are on the verge of bearish crossover, which may bolster channel pattern fallout.
Vortex indicator- the wide gap between the VI+ and VI- slopes following a bearish crossover accentuates aggressive selling in the market.
RSI- However, the RSI(38) slope sinking deeper into the oversold region would eventually bring demand pressure back to AVAX.
- Resistance levels- $78.8, and $100
- Support levels- $67 and $52
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