Short

The Avalanche Price Is at Risk of Losing Key Support

is retesting the lower barrier of a medium-term positive price channel that had formed on its daily chart over the past few weeks. This specific channel saw AVAX’s value rise from a low of $12.29 on Nov. 7 to a high of $48.27 on Dec. 23. Since reaching this peak, traders have started offloading their holdings in the cryptocurrency.

This wave of sell pressure resulted in the formation of a bearish descending triangle on AVAX’s daily chart. Should this pattern be validated, the Avalanche price may drop below the base of the triangle pattern, which is situated at $37.15. A break below this significant price point may then be followed by the cryptocurrency’s value falling to the subsequent support level at $27 in the coming few days.

This bearish thesis could be invalidated if the Avalanche price is able to close the next 2 daily candles above $37.15. In this alternative scenario, the crypto could enter into a short-term bullish move towards the $52.60 resistance level.

Technicals Suggest AVAX’s Correction Is Not Over Yet

Technical indicators on AVAX’s daily chart suggested that AVAX’s negative trend may continue in the upcoming 48 hours. Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) indicators support a bearish outlook.

The MACD line is breaking away below the MACD Signal line. In addition to this, the slope of the MACD Histogram is negative. These two technical flags are generally indicative of a continuation of a bearish trend. Sellers also seem to have the upper hand against buyers, as the RSI line is positioned below the RSI Simple Moving Average (SMA) line.

StevenWalgenbach

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