Oversold Technical Indicators Suggest An Upcoming Relief Rally In AVAX.

The V-top reversal in AVAX price continues to evaporate the June to early-August recovery as bearish clouds hover above the crypto market. As a result, the price has recently breached the $20 psychological support, indicating the sellers are looking to prepare another leg down.

Key points from AVAX analysis: 

• The AVAX price is on a sixth-day losing streak registering a 22.3% fall
• The daily-RSI slope nosedived into the oversold region
• The intraday trading volume in Avalanche coin is $442.4Million, indicating a 5.17% gain.

Source- Tradingview

On August 26th, the AVAX/USDT pair gave a decisive breakdown from the support trendline of the broadening channel pattern. This breakdown signaled the end of the previous recovery rally as prices also lost the 50% retracement level.

The bearish momentum accelerated with the completion of this pattern and plunged the AVAX price 11% down to $18.35. The post breakdown fall of three consecutive red candles and rising volume activity indicate sellers are quite committed to this downfall.

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Additionally, the AVAX price breached another support level of $20.3, suggesting the sellers are hoping to extend the correction rally.

Also read: The Avalanche Exposé Might Be A Paid Propaganda, Here’s Why

Technical Indicators 

Relative Strength Index: The daily-RSI slope plunged into the oversold region indicates the selling activity has overextended more than the stable price movement. Thus, the momentum indicator suggests the AVAX price is oversold or available at discounted prices.

Bollinger Band indicator: the coin price constant retest to the lower band suggests the same sentiment mentioned above. Thus, the indicator project a minor bullish before the price continues the prevailing downfall.

Upcoming trend:

Today, the AVAX price is down 1.2% but shows a long-wick rejection candle at the 0.786 Fibonacci retracement level, suggesting the buying pressure is rising at lower levels. Thus, with the technical indicator pointing to an oversold price, a possible bullish reversal may surge altcoin by 11.3%-18% to test the flipped resistance of the $20 or $22 mark.

Conversely, if coin prices sustain below these resistances, the bear trend would continue lower and possibly hit $16.

• Resistance levels: $20.4 and $22
• Support levels: $16 and $13.8