Signal price

Avalanche May Continue Downtrend As Price Slides To $16

Avalanche had been performing well over the past week, however, the coin has depreciated significantly over the past 24 hours. It has lost nearly 12% over the past day. AVAX saw strong resistance at the $21 mark and was unable to break through it, causing the asset’s price to fall further.

Bitcoin and other major market players also struggled to trade above their immediate resistance mark. BTC has been stuck at the $20,000 mark for the past few days. The broader market weakness has caused most altcoins to drop off their charts.

Currently, the most prominent altcoins including AVAX have been witnessing a wave of selling pressure. With increasing selling pressure, AVAX may approach the immediate support level of $14 during the next trading sessions.

Since the coin rebounded from the $20 price level, AVAX has since continued to move south on its 24-hour chart. The global cryptocurrency market capitalization today is $892 billion with a drop of 5.1% in the past 24 hours.

Avalanche Price Analysis: One Day Chart

Avalanche was priced at $16 on the one-day chart | Source: AVAXUSD on TradingView

AVAX was trading hands at $16 on the 24-hour chart. After being rejected at the $20 level, the coin continued to move on the downtrend. The next support line for the coin was at $14. If the coin is unable to hold above the $14 mark, it could trade near the $13 mark.

The overhead resistance was $21, although AVAX attempted to break above it, the coin failed several times, which allowed the bears to gain strength. The volume of AVAX traded decreased on the chart and the volume bar was red which signified selling pressure and decline.

Technical analysis

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Avalanche recorded a decline in buying strength on the 1-day chart | Source: AVAXUSD on TradingView

AVAX has barely registered any buying strength over the past month. Over the past few days, even though the coin has seen some recovery in buying strength, the current price drop has invalidated it. The Relative Strength Index was below the half line all month, with an occasional dip into the oversold region.

At press time, RSI again noted a decline suggesting a continuation of a downtrend. Conversely, the Moving Average Convergence Divergence flashed green signal bars. The indicator represents the current price direction and the possibility of price reversals as well.

Green signal bars on the MACD are considered a buy signal and this presents a buying opportunity. If buyers act on it, AVAX might feel some relief.

Related Reading | Whale Tracking, What This Bitcoin Divergence Could Indicate About BTC Price

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Avalanche posted lower capital inflows on the one-day chart | Source: AVAXUSD on TradingView

Buying momentum has faded from AVAX’s charts, as has the amount of capital inflows. Chaikin Money Flow represents capital inflows and outflows, the indicator was below the half line. This reading meant that capital inflows were less than outflows suggesting higher selling pressure.

The Bollinger Bands have tightened sharply indicating that an explosive price move could possibly be on the charts. Bollinger bands read price volatility in the market. Overall, the technical outlook remains strongly bearish for AVAX suggesting further southerly action for the coin.

If the buyers re-enter the market, the coin may successfully move higher for the next few trading sessions.

Related Reading | TA: Key Ethereum Indicators Suggest Sharp Drop Below $1,000

Featured image from www.avax.network, chart from TradingView.com