Overall, the cryptocurrency market is bearish right now, with coins like Avalanche (AVAX), Ethereum, Litecoin, XRP, Solana, and others all caught up in this trend. Currently, AVAX’s price is in a strong bearish move below the 100-day moving average (MA) and could remain in that direction for a while before turning back.
Technical indicators indicate a bearish trend for Avalanche
Looking at the chart from a 4-hour time frame, AVAX has dipped below both the 100-day moving average and the trendline. This could mean that the price is in a downtrend. The MACD indicator on the 4-hour time frame suggests a very strong bearish move as the MACD histograms are trending below the MACD zero line.
Moreover, both the MACD line and the MACD signal line are below the zero line. Considering the formation of the MACD indicator, this shows that there is a possibility that the price will move even further downwards.
Moreover, the Relative Strength Index (RSI), also on the 4-hour time frame, indicates a bearish trend as the RSI signal line moves around the oversold zone. Despite the potential for a retracement at this point, the price will fall even further after this.
The alligator indicator is another powerful tool used to determine the trend of an asset. If you look at the image above, you will see that both the alligator’s lip and teeth are crossed over the alligator’s jaw, pointing in the downward direction. This formation suggests that the trend is bearish and the price could experience a deeper decline.
What could happen next
Based on the previous price movement, there are two major resistance levels at $50 and $59.99 and a support level at $39.95. Since Avalanche is on a negative trajectory, if prices manage to break below the USD 39.95 support level, it could trigger a move further towards the next low at USD 27.53.
On the other hand, if the price fails to break below the previous low, it could start an upward correction move towards the USD 50.80 resistance level. However, if AVAX manages to break this level, it could move even further towards the $59.99 resistance level.
At the time of writing, the Avalanche was trading around $38, indicating a decline of 1.75% in the past 24 hours. The market capitalization has fallen by more than 16%, while trading volume has increased significantly by almost 250% in the past day.
Featured image from Shutterstock, chart from Tradingview
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