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Talks on US debt are expected to continue into the weekend.
The long/short ratio of the markets was neutral despite AVAX retesting the March lows.
The US debt talks have overshadowed the markets for a while, giving the bears an edge. Sellers further consolidated their hold following the May 24 FOMC minutes. interesting, Avalanche [AVAX] bears managed to retest the March swing low of $13.88.
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In the meantime, Bitcoin [BTC] broke below the $26.6k area as selling pressure increased. With speculation that US debt talks could stretch into Memorial Day weekend, there is likely to be volatility in the hours/days ahead.
Will sellers go lower, or will bulls gain ground?
The RSI on the 12-hour chart has been dominantly below the neutral level of 50 since the second half of April, indicating increased selling pressure over the same period. For CMF, there were swings between negative and positive zones, showing that capital inflows were faltering.
Overwhelming selling pressure caused AVAX to drop sharply from the supply zone (red), near $21-$22, to the March lows of $13.88 as of this writing. Underlying bearish pressure and weak BTC could tip the scale further in favor of bears.
As such, sellers could extend their gains past the March lows. The next support levels are $13.43, $12.81 and $12.07. These could act as short-selling targets.
However, if BTC regains the $26.6k level, AVAX bulls could have little leverage. They could try to clear the $14.41 hurdle and rise to $51.19. A move above this level could tip AVAX to retest the $16.3 level.
OI has yet to recover to mid-April levels
Read Avalanche [AVAX] Price prediction 2023-24
In mid-April, AVAX open interest rates (OI) rose above $160 million, pushing the price to $20. However, the OI fluctuated in May, falling significantly around the halfway point of the month before attempting a recovery.
But the OI has yet to recover to mid-April levels, further confirming bearish pressure.
In any case, AVAX’s long/short ratio showed very little diversification between long and short positions over the 12-hour time frame. As such, the price could move in either direction and tracking BTC’s movement could provide more clarity.
This post Back to March lows for AVAX as US debt talks continue
was published first on https://ambcrypto.com/avalanche-slides-to-march-lows-amidst-u-s-debt-talks/