What’s Next for the Altcoin?

AVAX Price Analysis: Support Levels, Indicators, and Potential Movements

Recent price movements in Avalanche (AVAX) have highlighted critical technical levels and patterns. Following the formation of a double-top "M-pattern" around the $55 mark, AVAX experienced a sharp decline, accompanied by a surge in liquidity due to increased short positions. However, the cryptocurrency managed to find solid support at $35—a key level marked by a cluster of trading volume, as depicted by the Volume Profile Visible Range (VPVR) indicator. Importantly, AVAX has successfully held above this level, without closing a daily candle below it. This $35 range also triggered the last upward momentum seen in early November.

Technical Indicators and Resistance Levels

Currently, AVAX is trading below its 50-day Exponential Moving Average (EMA). To shift its trajectory towards recovery, AVAX must breach this EMA, which serves as immediate resistance. Beyond this, the next hurdle is the $43 resistance level. If this level is surpassed, the VPVR indicates minimal traded volume between $43 and $50, suggesting limited resistance within this zone. Additionally, the presence of a "red glowing candle" on the chart highlights a significant liquidity area near these levels, potentially signaling a long-term price target.

Short-Term Chart Insights: 4-Hour Analysis

On smaller timeframes, recent upward momentum has been characterized by multiple green candles, signaling robust liquidity accumulation. The liquidation levels on the chart suggest substantial leveraged positions below the current price level. As such, a short-term pullback to the neckline of the recent W-pattern may occur. This neckline aligns with the 200-day EMA and the 50 EMA on the 4-hour chart, indicating a key support zone should the price retrace.

Moreover, relevant levels such as the "Yesterday High" and "Last Week Low" further emphasize the significance of this support region. These confluences make it a critical area to monitor for traders.

RSI and MACD Indicate Room for Growth

The Relative Strength Index (RSI) currently sits at 67, indicating a strong, yet not overbought, price level. A slight retracement to the 50-55 region could create a healthier environment for further bullish continuation. Meanwhile, the Moving Average Convergence Divergence (MACD) shows rising positive momentum, with the trend line trading above the signal line. This suggests the potential for further upward price action.

Impact of Bitcoin on AVAX

As with most altcoins, Bitcoin’s performance remains a crucial factor influencing AVAX. If Bitcoin maintains its support levels, it could foster overall market positivity, benefiting AVAX. Conversely, a sharp Bitcoin decline would likely pressure AVAX, even with its structurally sound chart patterns.

Key Takeaways for Traders

• Support Levels: $35 remains a crucial support zone for AVAX, validated by high traded volume on the VPVR.
• Resistance Levels: AVAX needs to reclaim the 50-day EMA and surpass $43 to target higher price zones with less resistance up to $50.
• Indicators: RSI and MACD show bullish potential, while lower timeframes suggest possible short-term pullbacks to support areas for consolidation.
• Market Influence: Bitcoin’s stability is essential for AVAX’s sustained upward momentum.

This technical setup suggests that AVAX is at a pivotal point, balancing between support levels and the opportunity to challenge resistance zones. Traders should keep an eye on key EMAs, volume patterns, and market-wide sentiment to gauge the cryptocurrency’s next move effectively.