On April 21st, the Avalanche(AVAX) price gave a bearish breakdown from a three-month-old rising wedge pattern. The post-retest fall tumbled the altcoin by 25%, bringing it to $60 psychological support. However, in the past three days, the coin price displayed a failed attempt to breach the $60 support, mounting a bear trap for aggressive sellers.
Key points:
- The 50-and-200-day EMA hints potential death crossover
- The AVAX traders respond to a descending resistance trendline
- The intraday trading volume in the AVAX is $872.5 Billion, indicating a 0.8% loss
Source- Tradingview
Last quarter the Avalanche(AVAX) price gradually rose within an ascending wedge pattern. However, pressured by the overall market sentiment, the coin price breached the bottom support trendline of this pattern.
The accelerated selling momentum plunged below the $67.6 and $60 support, reflecting a 25% loss. However, the sellers couldn’t sustain the AVAX price below the $60 mark, resulting in a support fakeout.
This bear trap must have trapped the aggressive sellers, and their forced liquidation will bring more buy orders to the market. The sustained buying may drive the AVAX price 8-9% higher to the $67.6 flipped resistance.
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However, the lower volume activity suggests a weakness to this relief rally, suggesting the coin price may revert from the descending trendline providing dynamic resistance to the AVAX price.
The AVAX price is currently trading at the $61.2 mark, with an intraday gain of 4.2%. However, until this resistance trendline remains intact, the coin price may witness aggressive selling from traders.
Technical indicator
MACD indicator– A sufficient gap between the descending MACD and signal lines indicates sustained buying in the market
ADX- A parabolic rally in the ADX slope reflects rising bearish momentum.
EMAs- The downsloping 50-day EMA nearing a death crossover with 200-day EMA attracts more selling in the market.
- Resistance levels- $67, and $80
- Support levels- $60 and $52
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