After witnessing a rampant up-channel (yellow) rally for over three months, Avalanche (AVAX) spiked its ATH on Nov. 21. It has since fallen while losing the vital $79 mark.
While the 20 EMA (red) declined to show signs of improvement and attempted to move below the 200 EMA (yellow), AVAX saw a sustained downward trend in the coming days. Should the price break above its immediate support, that would confirm a hidden bullish divergence and could fuel a short-term recovery towards its 20 EMA. As of going to press, AVAX was trading at $67.21.
AVAX Daily Chart
Since reaching its lifetime milestone, AVAX has lost more than 64% of its value and plunged to its 14-week low on January 22. It has since recovered its losses but struggled to challenge its trendline resistance (white).
The recent up-channel (white) outage tested the 200 EMA several times before testing the $66 support. This support also coincided with the trendline support (white, striped). However, when the 20 EMA tried to move below the 200 EMA, AVAX could see a further pullback.
Any close above the $66 support level could fuel a near-term recovery before the alt conforms to its long-term bearish tendencies. Also, the price has approached the lower band of the Bollinger Bands (BB), indicating that the price is not yet on the expensive side. This reading also brightened the chances of a pullback ahead of the ongoing downtrend. The bulls had to intervene at the $66 mark to prevent the occurrence of a major fallout.
The RSI has secured its base of 39 points, while price action has marked lower dips for the past three weeks. So a rebound in immediate support would confirm a bullish divergence with RSI. Further, the OBV also diverged by witnessing higher dips. So the following new candlesticks would be critical to confirm these differences. Nevertheless, the ADX showed a very weak directional trend for AVAX.
The RSI and OBV kept hopes of a near-term rebound alive for the bulls, but buyers still had to step in to defend its immediate support and confirm these differences.
In addition, broader sentiment analysis with the developments in the chain must be considered in order to make a profitable move.