Avalanche (AVAX) demonstrates exhaustion close to a crucial resistance area, hinting at a possible correction in its price trajectory. Given the discrepancies in prices, investors are advised to keep a close watch on specific levels for potential accumulation opportunities.
Avalanche (AVAX), ranked 10th in the crypto world, shows signs of exhaustion nearing the $51 to $56 resistance zone. Despite fluctuating between $50 and $60, there’s a potential correction indicated by the downward trend on the weekly chart. Long-term buyers may find the current price range suitable for accumulation. However, weakening upward momentum and the chance of price falling back to $39 support suggest caution. Investors should monitor key levels closely.
Bearish Divergence Signals Potential Correction for Avalanche (AVAX)
Avalanche (AVAX) surged past the $40 mark in late December, marking a significant milestone. However, from late December to mid-March, while AVAX’s price reached higher peaks, indicators like the Relative Strength Index (RSI) and Awesome Oscillator (AO) displayed lower peaks. This discrepancy, known as a bearish divergence, often precedes corrective movements in the asset’s price.
As a result, AVAX has retraced from its recent peak of $65, experiencing a 19% decline and showing potential for further downside. Currently, the price fluctuates between $45 and $50, indicating the first accumulation zone lies approximately 5% to 10% below the current level of $53. Investors should remain vigilant as the cryptocurrency navigates through this correction phase.
Potential Price Scenarios for Avalanche (AVAX)
If historical patterns repeat, a decline towards the accumulation zone could trigger sufficient buying pressure. This might enable AVAX to break through the resistance zone of $51 to $56 and potentially retest the critical barrier at $80. Notably, this level represents the midpoint of AVAX’s previous bear market.
Conversely, should AVAX’s price continue to decline beyond the $45 to $50 range, it would signal overall market weakness. In such a scenario, AVAX could retreat towards the weekly support level of $40.
Of particular concern is the possibility of a significant increase in selling pressure, potentially turning the $40 level into a resistance level for AVAX. This outcome could invalidate the bullish outlook, leading to a further 28% decline for AVAX and testing the next significant support level at $28. However, it’s important to note that this scenario is currently deemed unlikely.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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