Generally, the cryptocurrency market is currently bearish, with Avalanche (AVAX), Ethereum, Litecoin, XRP, Solana and others all caught in the trend. Currently, AVAX price is on a strong bearish move below the 100-day moving average (MA) and may continue in that direction for some time before pulling back.
Technical indicators suggest a bearish trend for Avalanche
Observing the chart on the 4-hour time frame, AVAX has crossed both the 100-day moving average and the trend line. This could mean that the price is going down. The MACD indicator on the 4-hour timeframe indicates a very strong bearish move as the MACD histogram is trending below the MACD zero line.
Also, both the MACD line and the MACD signal line are trending below the zero line. Looking at the formation of the MACD indicator, it shows that the price is likely to go further down.
Furthermore, the Relative Strength Index (RSI) also indicates a bearish trend on the 4-hour timeframe as the RSI signal line is trending around the oversold zone. Despite the potential for a retracement at this point, the price will further decline after this.
The alligator indicator is another powerful tool used to determine the trend of an asset. A look at the image above shows that both the crocodile’s lips and teeth are crossed over the lower crocodile’s jaw. This formation indicates that the trend is bearish and the price may fall further.
What can 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. As the avalanche is on the downside, if prices manage to break below the support level of $39.95, it could trigger another move towards the next low of $27.53.
On the other hand, if the price fails to break below its previous low, it may initiate an upward correction move towards the $50.80 resistance level. However, if it breaks above this level, AVAX could move further towards the $59.99 resistance level.
At the time of writing, Avalanche was trading around $38, representing a 1.75% drop in the last 24 hours. Its market cap has fallen by less than 16%, while its trading volume has increased significantly by almost 250% in the past day.
