In general, the cryptocurrency market is currently bearish, with coins like Avalanche (AVAX), Ethereum, Litecoin, XRP, Solana and others all caught up in this trend. Currently, AVAX price is in a strong downtrend below the 100-day moving average (MA) and could continue in this direction for a while before retracing.
Technical indicators suggest bearish trend for avalanches
Looking at the chart on a 4-hour time frame, AVAX has moved below the 100-day moving average and trendline. This could mean that the price is on a downward trend. 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.
Additionally, the MACD line and MACD signal line tend to lie below the zero line. Considering the formation of the MACD indicator, this shows that there is a possibility that the price will continue to fall.
Additionally, the Relative Strength Index (RSI), also on a 4-hour time frame, suggests a bearish trend as the RSI signal line is moving around the oversold zone. Despite the potential for a retracement at this point, the price will decline further thereafter.
The alligator indicator is another powerful tool used to determine the trend of an asset. A look at the image above shows that the alligator's lip and teeth have crossed over the alligator's jaw facing down. This formation suggests that the trend is bearish and the price could see a deeper decline.
What could happen next
Based on the previous price movement, there are two major resistance levels of $50 and $59.99 and a support level of $39.95. As Avalanche is on a negative trajectory, if prices manage to breach the $39.95 support level, it could trigger a further move towards the next low of $27.53.
On the other hand, if the price fails to move below its previous low, it could begin an upward correction move towards the $50.80 resistance level. However, if it manages to break above this level, AVAX could move even closer to the resistance level of $59.99.
At the time of writing, Avalanche was trading around $38, indicating a 1.75% decline over the past 24 hours. Its market capitalization has fallen by over 16%, while its trading volume has significantly increased by almost 250% over the past day.
Featured image from Shutterstock, chart from Tradingview
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