Avalanche (AVAX) slumped with the overall market, losing substantial value within the previous month. The downside moves from its 6-month trend-line resistance printed a declining wedge on the asset’s daily chart.
Trading amidst bearish markets might not be a lucrative move by investors. Nevertheless, interested one can watch for a closing beyond the current setup to claim potential near-term profits. While writing this content, AVAX traded at $34.17, following a 15.21% within the previous day.
Avalanche Daily Timeframe
AVAX has dropped over 84% since touching its record high, plummeting towards 9-month lows on May 12. Upward moves from the slump saw the token testing the falling wedge’s topside trend-line. The daily chart’s bullish hammer boosted the revival of Avalanche from $30.2.
A close watch shows Avalanche consistently discovered newer lows plus highs since its all-time high. As a result, the 20-Exponential Moving Average dropped under the 50EMA. Also, the gap between them expanded over the past couple of days.
That action confirmed sellers’ dominance in the current market structure. Meanwhile, the escalating gap between the moving average might affirm overstretched cases. Such developments would likely trigger a revival in the upcoming days.
A closing beyond the pattern would translate to near-term gains for AVAX as the token would target the range of $41 – $42. Nevertheless, the probability of a lucrative bull run appears minimal due to the somewhat weak buying volumes. Bulls should defend the value area at $30 to prevent extended declines towards $23.
Reasoning
The RSI saw a massive drop from the resistance at 44. Bulls have struggled to keep the 30-mark away despite several trials. The Signal lines and MACD have ceased from a bullish cross for almost six weeks.
That revealed a visible selling edge in the current marketplace. Meanwhile, the liens have resurged from such declines beneath the -10 mark. So, AVAX bulls would want to halt the selling momentum in the coming sessions.
Final Thought
If bulls step up on the prevailing falling wedge pattern, a closing beyond the formation will clear the path for Avalanche to retest the $41 to $42 range. Nevertheless, buyers should propel surged buying volumes to ease the steady actions of sellers. Finally, enthusiasts need to watch Bitcoin’s movement for lucrative undertakings.
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