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Crypto nugget: Avalanche (AVAX) regains strength, will it last?

In this new analysis from Wednesday, we take a look at one of the most important blockchains in the crypto ecosystem. The goal is this: analyze the native token to see the price structure. So you got it, AVAX is in sight for the crypto nugget of the day. Is it in a situation that favors a bullish evolution or, on the contrary, are the sellers out? Let’s go straight to TradingView.

This analysis of AVAX is brought to you in collaboration with Coin Trading and its algorithmic trading solution finally available to individuals.

AVAX in clear bearish momentum

AVAX rate against the dollar weekly

After evolving under resistance during the first part of 2021, AVAX retreated during the summer of 2021. It then exploded higher registering an all-time high at 147 dollars. AVAX has reversed and is now trading in bearish momentum. This pattern has a high of $103.62 and a low of $13.71. Moreover, the internal structure is still poor. As long as $29.11 it won’t be busy, we won’t have a weekly reversal signal. Therefore, in order to better understand the recent evolution of the price, it is necessary to go to a smaller time scale.

If there is a trend change on the weekly timeframe, we can consider new bullish targets. But for now nothing can be reported and we have to follow the trough $13.71. In case of loss of the latter, AVAX it will most likely go back below $9.32. This price action will allow it to seek liquidity below the weekly low of Summer 2021. Without further ado, let’s now move to the daily time unit.

Unclear trend on a daily scale

AVAX cryptocurrency price against the dollar on a daily basis
AVAX price against the dollar on a daily scale (1D)

Although the momentum pattern is also in a bearish time frame, we have to see that the trend is bullish on AVAX. So we have to follow the evolution of the price between $13.78 and $29.11. This uptrend is materializing with the strength of the demand zones that AVAX bounces to each time. You can see that the CHoCH ($19.55) bearish point is at the confluence of two demand zones, one of which is a reversal zone. After breaking the supply zone (represented in red) to the upside, the price returned to the demand zone at the beginning of this movement to recover.

Price has been able to initiate some nice bullish momentum within this swing pattern. Theoretically, the top should be preserved. Therefore, the perfect pullback would be for the price to return to this level without closing higher. Hope to returnAVAX at this level, the asset must break the bid zone to the upside. This will allow a break of the structure to maintain the bullish momentum of the internal structure. If AVAX breaks its momentum high to the upside, it will trigger a structural change on the weekly time frame. Conversely, the first sign of a reversal to the downside would be a price return below $19.55. This breakout level could be raised if AVAX continues to make new highs.

Beware of AVAX’s Bitcoin situation

AVAX price vs. bitcoin on a daily basis
AVAX Price vs Bitcoin on Daily Scale (1D)

Against Bitcoin, we are at a key moment that will inform AVAX’s trend for the next few weeks. The goal is simple: AVAX must break through the red zone, which it is currently resisting. This would allow him to register a new vertex to continue surpass Bitcoin. If this happens, it will likely return to its high and, at best, we may see a change in structure on a daily basis. This would allow AVAX to perform well to continue rising against the dollar in case bitcoin is also in a bullish configuration.

However, if it fails, it still records peaks and troughs lower than previous ones. We will have a set of signals that could alert us to the end of the uptrendAVAX vs. Bitcoin. Indeed, we will have a loss of slant support, a failure of continuation resistance, and potentially a loss of the horizontal level that marks 50% of the swing range. If the first gray zone is lost, we will have to keep an eye on the first orange zone which is the supply zone, as well as lower levels which could mark a recovery of AVAX against bitcoin. In the chart you can find some notes about the different possible scenarios.

Here we are at the end of the analysis a there isltcoin which managed to hold above the Summer 2021 level. Nothing is decided yet until we miss the price reversal on the weekly scale. Right now we are simply in a bullish correction within a bearish market. So you have to monitor identified key levels at par, either against the dollar or bitcoin. As the daily trend is bullish, we have to take into account reasonable bullish targets until proven otherwise. This will of course depend on the dynamics relative to bitcoin and the path the asset is taking.

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