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AVAX’s MFI has been in overbought territory and is ripe for a possible price reversal
However, a breakout above $12.10 would invalidate the bearish forecast
Avalanche [AVAX] The 2023 rally gained more than 14% after rising from $10.71 to $12.30. Then it cooled down and the price correction came in at $11.45.
At the time of writing, AVAX was in another uptrend but facing a challenge after Bitcoin [BTC] failed to overcome the $17K resistance. AVAX was trading at $11.77 and could fall lower to retest the $11.45 support if the BTC price correction continues.
Read Avalanche [AVAX] Price prediction 2023-24
The target at $12.10: Can the bulls aim for it?
AVAX fell below its late December trading range of $11.59 – $11.85, but found solid support at $10.71. The transition to the new year formed a double bottom, paving the way for price recovery.
However, AVAX encountered a bearish order block at $12.10, forcing it into a price correction, which support held in check at $11.45.
The price recovery in the press could prove difficult as the Money Flow Index (MFI) had reached overbought territory. This suggests that accumulation has peaked and distribution could be underway, triggering a price reversal.
The Relative Strength Index (RSI) was rejected midway through, but moved slightly up and sideways. The On-Balance Volume (OBV) also fell slightly. This indicated that buying pressure gradually increased after a sharp decline, but it was not enough to push the bulls to target the USD 12.10 level.
Therefore, AVAX could fall back to $11.59 or $11.45. Short sellers can sell high at these levels and buy back cheaper.
However, a breakout above the $12.10 bearish order block would invalidate the forecast. Such a move could allow AVAX bulls to target $12.46, especially if BTC is bullish.
AVAX’s OI fell, but the outlook and futures market demand remained unchanged
According to Coinglass, AVAX’s open interest increased from mid-December and appeared to have peaked as it went to press. This indicated that AVAX saw a greater inflow of money into the options and futures markets.
However, the drop in AVAX’s OI at the time of going to press suggests that more money was leaving the futures market.
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Nevertheless, AVAX sentiment remained positive and demand in the derivatives market remained unchanged, as evidenced by the positive and unchanged Binance Funding Rate for the AVAX/USDT pair.
This means that AVAX could potentially rally if BTC attempts a recovery. Therefore, investors should keep an eye on BTC before taking any action.
This post AVAX traders looking to sell may want to read this before making a move
was published first on https://ambcrypto.com/avax-traders-looking-to-sell-may-want-to-read-this-before-making-any-moves/