- Avalanche showed a bearish momentum divergence on the one-day time frame.
- The liquidity below $50 provided an attractive buying opportunity.
Avalanche [AVAX] has fallen from $65.39 to $56.89 in the last 24 hours, a drop of 12.9%. The long-term bias was bullish, but the price action showed that we could expect further losses.
In other news, the Avalanche Foundation has announced its investment in five meme coins. The chips on the list saw significant trading volume and increased following the Foundation’s announcement.
There was a momentum divergence
Source: AVAX/USDT on TradingView
Since March 12, the RSI on AVAX’s one-day time frame has hit lower highs while AVAX prices have moved higher. This was a bearish divergence.
It suggested that a pullback was likely around the corner for the token.
On the other hand, the OBV continued to rise alongside the price. This suggested that buying pressure has not abated and any pullback is likely to see a quick recovery.
To the south, the former bearish order block on the daily chart at $48 was a demand zone.
A move just below the low of $46.2 seemed likely given the market-wide selling pressure and momentum divergence.
Understanding liquidity charts
Source: Hyblok
AMBCrypto analyzed Hyblock’s liquidation heatmap data to see what AVAX would be attracted to. The $65.8-$66 region was the bullish target.
However, $48.15 and $45.94 were more likely targets given their proximity to demand zones.
Is your portfolio green? View the AVAX Profit Calculator
Like Bitcoin [BTC] If prices are lower in March, this would drag the crypto market further south. Therefore, AVAX investors could wait for a dip below $50 before adding to their positions.
The long-term uptrend is expected to remain intact as a decline below $34.83 is needed to turn the one-day market structure bearish.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.