- Avalanche prices are likely to rise further in the coming weeks.
- Higher time frame price charts and liquidity pockets have highlighted potential areas for a trend reversal.
Avalanche (AVAX) is starting to reverse the losses it suffered in May and June. Just a week ago, the move above $30 was a signal of bullish intent, and more gains were likely to come.
However, the higher time frame trend may not be favorable for long-term investors right now. Fibonacci levels provide clues as to where price may move next and what may follow.
AVAX bulls should prepare for profit taking.
Source: AVAX/USDT on TradingView
At the time of writing, the market structure was bullish on the daily but bearish on the weekly, meaning a move to $40 could be expected before a bearish reversal.
I drew a set of Fibonacci correction levels using the May and June price declines. The 50% level at $32.66 already served as resistance.
The daily RSI was at 51, showing minimal upside momentum after last week’s bounce. OBV was also relatively flat in June, suggesting that the Avalanche bulls are yet to see the strength for a major rally.
Magnetic zones and hints in reverse position
Source: Highblock
Earlier this month, a liquidity pool of $30.8 pushed the price up. AVAX surged to $33 before falling back. Further north, targets are $34.3, $37.5, and $39.5.
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There is a risk that the price will form above $30 and go lower, which could increase liquidity in this area.
They matched up quite well with the Fibonacci correction levels described earlier, so swing traders can expect the market structure on the weekly timeframe to remain valid until the $38 level is broken.
Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and is solely the opinion of the author.