Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice

Like most altcoins, Avalanche (AVAX) noticed a significant drop in value over the past month. The sell-off of the six-month trendline resistance (white, dashed) caused a falling wedge (white) on the daily time frame.

Trading against the bearish market structure may not be a profitable choice. But investors should look for a close above the current pattern for cashing likely short-term gains. At the time of writing, AVAX was trading at $34.17, up 15.21% in the last 24 hours.

AVAX Daily Chart

Source: TradingView, AVAX/USDT

Since reaching its lifetime milestone, AVAX has lost more than 84% of its value and plunged to its nine-month low on May 12. On its way up from there, the alt tested the upper trendline of the falling wedge. The bullish hammer on the daily chart stimulated this rally from the USD 30.2 level.

From a bird’s eye view, AVAX has consistently found fresher lows next to lower highs since its ATH. Consequently, the 20 EMA (red) jumped below the 50 EMA (cyan), as the gap between them has continued to widen in recent days. This reading revealed a clear advantage for the sellers in the current market structure. That said, a prolonged rising gap could also confirm an overstretched situation. So this leads to a likely rebound in the coming days.

Any close above the pattern would expose AVAX to short-term gains, while it would be on track to test the $41-$42 range. With relatively weak buying volumes, the chances of a profitable bull run seem pretty slim right now. On the downside, the USD 30 level would be vital for the bulls to maintain to avoid a further decline towards the USD 23 floor.

rode

Source: TradingView, AVAX/USDT

The Relative Strength Index underwent a robust decline in resistance with 44 levels. Despite multiple attempts, the bulls are struggling to undermine the bonds of the 30 mark.

The MACD and signal lines have now avoided a bullish crossover for nearly six weeks. So revealing a visible sales advantage in today’s market. Historically, these lines picked themselves up after taking such a dip below the -10 level. The bulls would therefore try to ease the selling pressure further in the coming period.

Conclusion

If the bulls take advantage of the current falling wedge setup, a close above the pattern would open doors for a retest in the $41-$42 range. However, buyers still need to drive an uptick in buying volumes to ease steady selling pressures to counteract.

Last but not least, the investors/traders should keep a close eye on Bitcoin’s movement. This reading would enrich the understanding of the overall market structure and dynamics in addition to these technical factors.



This post Why investors should watch these AVAX price levels this week

was published first on https://ambcrypto.com/why-investors-must-keep-an-eye-on-these-avax-price-levels-this-week/

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