- Avalanche price is declining in stair-step fashion, hinting at an explosive move to come.
AVAX price shows an influx of bearish volume after breaching the 8-day exponential moving average.
Invalidation of the bearish thesis is a breach above $17.
Avalanche's AVAX price may be headed for pain as the bull's attempt to rally higher post-weekend decline shows weakness. Key levels have been defined.
AVAX price shows weakness
Avalanche price demonstrates a developing downtrend. AVAX, the Ethereum-based gaming token, has lost 12% of market value since the beginning of October. A 3-wave pullback has been established, and the movement's strength suggests AVAX will fall further.
Avalanche price currently auctions at $15.81 as the bears have put an end to the countertrend ascension. The newfound rejection has breached the 8-day exponential moving average (EMA), and an uptick in bearish volume is displayed. It is worth noting that the bullish countertrend move showed relatively less volume when compared to the previous downtrend rally.
AVAX/USDT 4-Hour Chart
Still, the Relative Strength Index (RSI) solidifies the bearish narrative. The RSI rejected the previous countertrend move at the ideal level for bears to enter the market. The most recent 4-hour candle has also breached oversold territory, hinting that the move south is no ordinary correction.
It was mentioned in a previous thesis that a failure to hold above the 8-day EMA at $15.80 will wreak havoc on the AVAX price. Now that the breach has occurred, the bears will likely aim for the monthly lows at $14. Investors can expect a level of bullish interest to surface near the $13 price zone based on the location of previous liquidity zones in 2020.
Invalidation of the bearish thesis is a breach of the October 10 high at $17. If the bulls manage to tag the invalidation level, a retaliation–rally can occur. The $20 liquidity zone would be a possible target, resulting in a 26% increase from the current AVAX price.
In the following video, our analysts deep dive into the price action of Avalanche, analyzing key levels of interest in the market. -FXStreet Team