Avalanche Bulls Will Find Their Way Out of the Bearish DominanceAugust 20, 2022
The recent liquidation of the initial symmetric triangle on the Avalanche network dragged the asset under its eight-month support line. However, the general market’s growth helped bullish traders in establishing their position above the $21 area. Aside from that, the latest pattern of breakdown might reduce the pace of the short-term bullish move.
Will Buyers Defend the Line?
However, if buyers insist on defending that $21 area, then AVAX might experience a very little amount of volatility before it has any chance of reviving. AVAX trades at $22.47 as of the time of this report, going down by almost 14% in the past day.
AVAX has lost over 90% of its price value from its all-time high. The asset dropped in the direction of its 10-month low level on the 19th of June. Back then, bulls quickly reclaimed a position above the supportive trend line.
The recovery witnessed signs of a reversal from the resistance range of $30 – $31. The latest round of increasing wedge break brought about an increased sales volume but AVAX dropped under its exponential moving average line.
Note that the price action is currently approaching the support range of $20 – $21. At that point, buyers would be looking at getting an opportunity for a rebound. The possible target at that point could be in the $24 area but if buyers display any inability to step into the opportunity, then the dullness would be encouraged to continue.
The Need for a Clear Break
In that scenario, AVAX might be pushed into a squeeze in the days to come. But a convincing close under the $20 line will be able to open opportunities that will place the target in the range of $16 – $18. Traders are now in the position to cautiously consider the impact of necessary macroeconomic conditions on the sentiments that move the market.
After breaking the support line, the relative strength index dropped in the bears’ area and planned to go into the oversold area. The bulls still have a long way to go if they would turn the situation around.
It looks like the OBV has held on to its line of support. But while at that, further pullbacks might instigate a bullish push over the short term. Traders must, therefore, be on the lookout for rebound opportunities before they place bets.
The MACD bears’ movement confirmed the strength of the bears. But lines had not fallen under the midline to show a lopsided bearish advantage.