- Avalanche prices are likely to move higher in the coming weeks.
- The higher timeframe price chart and liquidity pockets highlighted the potential areas for a trend reversal.
Avalanche [AVAX] began to reverse the losses it had suffered in May and June. The move past $30 just over a week ago was a sign of bullish intent, and it was likely that more gains were ahead.
However, the higher timeframe trend may not be in favor of long-term investors at this time. The Fibonacci levels provided clues as to where the price might move and what might follow.
AVAX bulls should be ready to take profits
Source: AVAX/USDT on TradingView
At the time of writing, the market structure was bullish on the daily chart, but bearish on the weekly chart. This means we can expect a move towards $40 before a bearish reversal occurs.
Using the May and June price drops, a series of Fibonacci retracement levels were plotted. The 50% level at $32.66 has already served as resistance.
The RSI on the day was at 51, showing minuscule upside momentum after last week’s retracement. The OBV was also relatively flat in June, indicating that the Avalanche bulls do not yet have the strength for a major rally.
The magnetic zones and hints of the location of the reversal
Earlier this month, the $30.8 liquidity pool pulled prices higher. AVAX rose to $33 before falling lower. Further north, $34.3, $37.5 and $39.5 are the targets.
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Prices may rise above $30 and threaten to fall further, increasing liquidity in these areas.
They matched up quite well with the Fibonacci retracement levels outlined earlier. Therefore, until the $38 level is breached, swing traders can expect the weekly time frame market structure to hold.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.