- The former support zone at $23.5 served as resistance during the recent bounce.
- The strength of the sellers was too high and the downtrend is expected to continue this week.
As a seasoned researcher with years of experience navigating the crypto market, I find myself cautiously bearish on Avalanche [AVAX] at present. The recent support zone at $23.5 serving as resistance is a telltale sign of the ongoing downtrend, and the rejection at the $22.8 level only strengthens this view.
As AVAX approached the temporary support of $19.6, its trajectory continued to lean towards a bearish outlook in the one-day view. Amidst Bitcoin‘s fall below $60k, the overall mood within the cryptocurrency sector seemed gloomy.
As a researcher examining the current state of AVAX, I’m concerned about potential further declines in its value. Unfortunately, the sentiment in the futures market doesn’t seem to be overly optimistic. Given this context, it’s important to consider possible price targets if a drop were to occur.
Avalanche retests former support zone as resistance
Between late-June and beginning of August, the $23.5 price point served as a foundation for the crypto. Under heavy market downturn, it was momentarily surpassed but later proved to be a barrier when tested recently. A brief rally in AVAX towards $22.8 was dismissed.
Every day, the Relative Strength Index (RSI) remained lower than the neutral 50 level, while the On-Balance Volume (OBV) persistently declined. This combination suggested a robust downward pressure, or bearish momentum, and a scarcity of buying interest.
Based on current market trends and Fibonacci extensions, potential upcoming targets for the price are around $19.2 and $14.37. The movement of Bitcoin may significantly impact Avalanche, as its trajectory has been affecting it lately. The sentiment seems to be turning bearish again since Bitcoin dipped below $60k once more.
Speculative interest was weak during the price bounce
In simpler terms, it seemed uncertain that Avalanche would bounce back based on the futures market, as even when its price hit $22.8 on August 8th, the funding rate remained only slightly above zero.
The Open Interest increased from $152 million to $165 million, indicating a general hesitation among bulls about the market’s direction, even though prices momentarily rebounded.
Read Avalanche’s [AVAX] Price Prediction 2024-25
After that point, both the Open Interest (OI) and the funding rate decreased together with the price. Meanwhile, the Spot Cash-Settled VIX (CVD) was gradually falling as well.
Together, the short-term market sentiment was bearish, and more losses are expected.
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2024-08-12 19:03