By Nathan Ferguson
Avalanche (AVAX) has seen intensified selling momentum since retracing from the April peaks. Liquidations from $95 dragged the alternative token beneath its 6-month trend-line resistance. Such developments emerged as bears plagued the crypto space.
For now, Avalanche exhibits a visible downturn. Therefore, investors need to be wary before executing long bets. As the alt nears the short symmetrical triangle’s apex, faded buying momentum might trigger a near-term decline. While writing these lines, AVAX hovered near $24.87, 1.61% up from the previous day.
Avalanche 1Day Timeframe
Avalanche lost over 85% as it declined towards 9-month lows on May 27. The alt formed a short symmetrical pattern following a rebound from 7-month trend-line support. Meanwhile, the latest bearish engulfing candles highlighted intense selling strength than buy orders, confirming a bearish edge.
The 20 Exponential Moving Average moved beneath the EMA50, stretching the gap between the MAs within the past days. The reading presented a bearish stance on the prevailing market structure. A closing beneath the patter and support at $23 might see AVAX losing 10% towards the $20 – $21 value area.
Nonetheless, such an over-stretched distance by the 20-50 Exponential Moving Averages has provoked buying resurgence. Nevertheless, Avalanche buyers should secure a closing beyond the 6-month trend-line hurdle and the 20 Exponential Moving Average.
Reasoning
The RSI has struggled to break past 39 for more than one month. Its current outlook confirms the general bearish outlook for the altcoin. Though Aroon-up displayed a northbound trajectory, traders should wait for a closing beyond 70% before executing long positions. Lastly, the on-balance volume bullish divergence can strengthen the squeeze around the current territory.
Final Thought
Bears taking advantage of the prevailing sentiment might trigger a closing beneath the setup, cleating the gates for declines to go $20 – $21. Buyers should ensure upsurges in buying volume to cancel the possible bearish results.
Moreover, AVAX investors should watch BTC’s actions as they can affect Avalanche’s price reactions. While publishing this content, Bitcoin traded at $30,112, recording a 0.83% decline within the past day. The leading crypto sees bearish tendencies, and sudden plunges would support Avalanche’s bearish actions.