Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
- The $13 support area flipped to a resistance.
- Demand and volume on the futures market fell.
Sellers consolidated more ground in August amid surrounding uncertainty Bitcoin [BTC]. Recent BTC price swings have exposed most altcoins, including Avalanche [AVAX]to lose substantial value between mid-July and early August.
For perspective, AVAX was down 20% after dipping from > $15.5 to less than $13 at the time of writing.
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At the time of writing, BTC was struggling to defend the $29.0k mark and could provide additional shorting opportunities if the weakening continues in the coming hours/days.
AVAX is retesting June/July support
Source: AVAX/USDT on TradingView
The $12 area was a key support zone in June and July. With each retest, AVAX recovered to $13.5 over the past two months, making it a major price reaction level. So another price reversal could happen at this level.
But the weak BTC means the AVAX bulls could struggle to reclaim the bearish breaker from $12.9 – $13.4 (cyan). A price rejection at the overhead hurdle could present another opportunity to go short. If so, $12.9 and the white range of $12.1 – $12.4 are entry and take profit levels respectively.
But a close above $13.2 could invalidate the above bearish idea. In such a scenario, a session above $13.2 will be the exit target, especially if BTC reclaims the previous low range of $29.5k and $30k.
The Relative Strength Index (RSI) and Chaikin Money Flow (CMF) were below thresholds, confirming the prevailing selling pressure at the time of writing.
Volumes and demand fell on the futures market
Source: Coinalyse
Coinalyze confirmed the bearish bias of the price chart. In particular, AVAX recorded a volume decline, as evidenced by the negatively sloping Cumulative Volume Delta (CVD) reinforcing seller dominance.
How many Worth 1,10,100 AVAX’s today?
Similarly, open interest rates (OI) fell further at the end of July, but stabilized between August 1 and August 3. The above stats illustrate a bearish future market bias and reinforce seller leverage.