Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The higher time frame charts showed that the mid-April rally failed to break any major highs.
- This was followed by a downtrend in May, but the $13.8 area provided some opposition for the sellers.
Avalanche had a bearish bias on the price charts. It is the fifth largest blockchain in terms of TVL, but DeFi activity has stagnated in recent months. In other news, SushiSwap announced the launch of their v3 product suite on Avalanche.
Read Avalanches [AVAX] Price Forecast 2023-24
The price action provided short sellers with an opportunity. The structure was bearish, but volatility was high over the last 48 hours despite the dominance of the sellers. If prices fall below $13.5, it would signal a continuation of the downtrend.
The Fibonacci levels showed where bears can look to enter a trade
Source: AVAX/USDT on TradingView
The market structure was bearish on the daily time frame and a downtrend was underway. The 4-hour chart also showed a downward trend. In May, the price formed a series of lower highs and lower lows.
The $13.88 level served as support, but AVAX still reached a low of $13.71 on May 25. On June 5, the price fell to $13.48, showing that bears remained dominant. Despite the jump to $14.6 on June 7, the market structure remained bearish.
Monday’s move was used to plot a series of Fibonacci retracement levels (light yellow). It showed the 78.6% retracement level at $14.62, explaining the bulls’ inability to raise prices. Having established the bearish nature of the market, a short trade can be entered following a retest of the 50% retracement level at $14.21.
The 23.6% and 61.8% Fibonacci extension levels of $13.14 and $12.58 can be used to make profits. A move by AVAX above $14.93 would invalidate this notion as it represents a major lower near-term high.
Spot CVD remained flat to notice indifference from buyers
Source: Coin analysis
It has been noted that prices bounced to the $14.62 level on Wednesday. Despite this, the spot CVD continued to decline. In the past 24 hours, the metric was flat, showing that buyers were outnumbered and selling pressure was overwhelming.
Is your wallet green? Check out the Avalanche Profit Calculator
Open Interest increased slightly to almost $10 million. However, when AVAX was rejected for $14.6, the outstanding interest fell further. This development indicated discouraged bulls. Overall, bearish sentiment prevailed on both the low and high time frames.