Cryptocurrency markets in general are currently bearish, and coins such as Avalanche (AVAX), Ethereum, Litecoin, XRP, Solana, etc. are all caught up in this trend. AVAX price is currently in a strong downward trend below its 100-day moving average (MA) and may continue in that direction for some time before reversing.
Technical indicators suggest a bearish trend for Avalanche
Looking at the 4-hour chart, AVAX has crossed below both the 100-day moving average and the trend line. This may mean that the price is in a downward trend. The 4-hourly MACD indicator suggests a very strong bearish move as the MACD histogram is trending below the MACD 0 line.
Additionally, both the MACD line and MACD signal line are trending below the 0 line. Considering the formation of the MACD indicator, it shows that the price is still likely to fall further.
Additionally, the 4-hour relative strength index (RSI) also indicates a bearish trend because the RSI signal line is trending around the oversold area. Although there is a possibility of a retracement at this point, the price will likely fall further thereafter.
The Alligator indicator is another powerful tool used to determine the trend of an asset. In the image above, you can see that the alligator’s lips and teeth are all crossed over its jaws, pointing downward. This formation suggests that the trend is bearish and the price may see a bigger downside.
What could happen next?
Based on the previous movement of the price, there are two major resistance levels at $50 and $59.99 and a support level at $39.95. Since Avalanche is on a negative trajectory, if the price falls below the support level of $39.95, it could trigger a further move towards the next low of $27.53.
On the other hand, if the price fails to break below the previous low, it may initiate an upward correction move towards the resistance level of $50.80. However, a break above this level could move AVAX further towards the $59.99 resistance level.
At the time of writing, Avalanche is trading around $38, down 1.75% in the last 24 hours. While market capitalization has decreased by more than 16%, trading volume has significantly increased by almost 250% over the past day.
Featured image from Shutterstock, chart from Tradingview
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Source: NewsBTC.com