Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
AVAX was upbeat, but buying pressure eased as it went to press.
Daily price volatility decreased; feeling improved.
Avalanche [AVAX] broke out of its multi-week range of $16.5-$18.3 and retested a stiff supply zone of $21-$22. Price action has fluctuated between $20.4 and $21.5 in recent hours, indicating that short-term bulls are closing their positions did not exit – a bullish sentiment.
However, AVAX could face a rapid pullback if more traders reap short-term gains at the current level.
Read Avalanche [AVAX] Price prediction 2023-24
In the meantime, Bitcoin [BTC] has recovered its $30,000 but still trades within the lower end of its recent $29.6,000 – $30,000 range. It shows that BTC also faced looming selling pressure that could spill over to AVAX and other altcoins.
Will sellers gain more influence?
Source: AVAX/USDT on TradingView
At the time of writing, the RSI has pulled back from the overbought zone, indicating that buying pressure has eased. In addition, the stochastic RSI moved into the oversold zone – probable increased selling pressure without negating a possible reversal. In addition, the sharp rise in ADX (Average Directional Index) was tapering off, reinforcing a weakening uptrend.
As such, AVAX can undergo a rapid retracement before attempting a rebound. Short-term bulls can wait and take advantage of the rebound, especially if AVAX drops to 50-EMA ($19.62) or the $18.31 confluence area.
The confluence area corresponds to range support next to a rising trendline and could present a good buying opportunity, especially if AVAX retests the supply zone.
A close above $22 (supply zone) will invalidate the bearish outlook. Such an uptick could dent prevailing bearish sentiment and tilt bulls to target higher levels in the near term. The next major resistance levels were at $22.80 and $23.76.
Off-exchange supply fell despite whaling activity
Source: Sentiment
Is your wallet green? Account AVAX profit calculator
AVAX’s market cap rose sharply after AVAX’s appreciation from $18 to over $20. But the market cap fell as price volatility subsided. It means AVAX’s price could stabilize before volatility returns.
Nevertheless, weighted sentiment improved, reiterating investors’ confidence in the positive outlook for the asset. However, any further uptrend and clearing of the supply zone hurdle may depend heavily on BTC moving past $30.4k.
This post Avalanche [AVAX] consolidates near supply area; Is a relapse likely?
was published first on https://ambcrypto.com/avalanche-avax-consolidates-near-supply-zone-is-a-pullback-likely/
