Avalanche (AVAX) price analysis: Is the recovery over?
Avalanche could witness heightened volatility in the next few days
Contents
- Avalanche technical analysis: Weekly chart
- Avalanche technical analysis: daily chart
- Avalanche: Buy or sell at current levels?
The cryptocurrency markets have been trading sideways this week as traders are cautious in the lead-up to the Jackson Hole economic symposium, scheduled to begin on 25 August. Investors will be keenly watching for the Federal Reserve’s outlook on the economy and for any insights on the pace of future rate rises. AVAX, the native coin of Avalanche, the “Ethereum-killer” blockchain, has been trying to gradually climb above $24 as of 25 August 2022.
The blockchain created several records in August, which may be attracting buyers at lower levels. The Twitter account Avaxholic highlighted that Avalanche hit a new high for the number of daily transactions, daily gas usage, delegator count and USDC native supply.
—
However, it is not all positive for Avalanche because the total value locked, which had recovered to $3.44bn on 31 July, has dropped to $2.72bn, according to the Defi Llama.
In other news, WisdomTree Investments, a New York-based exchange-traded fund and exchange-traded product (ETP) provider and asset manager, announced on 22 August that it was adding Avalanche and Polygon to two physically backed cryptocurrency basket ETPs, WisdomTree Crypto Market (BLOC) and WisdomTree Crypto Altcoins (WALT).
Is the recovery over or could AVAX go up? Read the AVAX price analysis to find out what the charts suggest.
Avalanche technical analysis: Weekly chart
AVAX’s price is showing signs of forming a bottom. The price recovered sharply to about $30, where short-term traders seem to have booked profits. However, a positive sign is that the bulls are attempting to arrest the decline near $23.
If they succeed, it will suggest that the sentiment has turned positive and traders are buying on dips. The bulls will then make one more attempt to push the price above $31. If they succeed, the AVAX/USD pair could rise to the 23.6% Fibonacci retracement level of $35.49 and later to the downtrend line. This level is again likely to act as a major hurdle.
What is your sentiment on AVAX/USD?
Conversely, if the price turns down from the current level, the bears will sense an opportunity and try to sink the pair to the crucial support zone between $13.71 and $16.16. A break and close below this zone could signal the resumption of the downtrend. The next major support on the downside is $9.33.
Avalanche technical analysis: daily chart
AVAX’s price broke above the overhead resistance at $27.71, but the bulls could not build upon this advantage. The bears sold aggressively, and pulled the price back below the breakout level.
A minor positive is that the bulls did not allow the price to dip below the uptrend line. This suggests demand at lower levels. The bulls will now make another attempt to push the price above the overhead resistance. If they succeed, the pair could rally to $36.57.
The relative strength index (RSI) is in negative territory, indicating that bears have a slight edge. If the price turns down from the current level and breaks below the uptrend line, it will suggest that the recovery may be over. The pair could then slide to $20 and later to $16.16.
Avalanche: Buy or sell at current levels?
Buyers are attempting to defend the uptrend line but the shallow bounce suggests resistance at higher levels. If the price turns down and breaks below the uptrend line, Avalanche’s price analysis suggests a drop to $20 and then to $16. On the other hand, if bulls push the price above $24, the pair could rally to $27.71.
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.
