Avalanche (AVAX) could not overcome the peaks it recorded earlier this month at $127. A massive rejection at that value area saw multiple former support floors, translating to bearish momentum in the altcoin. AVAX seems ready to test the $104 and $101 zones again.
Meanwhile, the chart pattern and the critical $104 had a confluence. Nevertheless, the question remains, will buyers feel overwhelmed, or they’ll still set bids?
AVAX – 4Hr Chart
According to the 4hr timeframe, Avalanche formed a descending channel. Meanwhile, the channel’s mid-point has acted as support and resistance over the past few days and seems to register a similar scenario in the coming few days. Nevertheless, the $108.7 mark has been vital in recent weeks.
Market conditions force Avalanche to a close under this mark before testing the level as its resistance. That meant the altcoin might target the channel’s lower zones for demand. That confirmed sellers’ momentum. Furthermore, the vital zone and FIB retracement area were inside the $100 – $120 range.
Meanwhile, buyers succeeded in launching a surge from $76 to flip the $100 mark into demand. Selling momentum materialized since Avalanche failed to crack $127. The following support area stands at $101, then $98.
Reasoning
According to the four-hour timeframe, the Relative Strength Index suggested that bulls need to hold 37-level. A close under this mark had Avalanche exploring downside marks.
On the other side, bouncing off the level resulted in near-term highs. While publishing this blog, a bounce emerged. The Chaikin Money low (CMF) remained beyond +0.05, indicating capital flow into the market plus buyers’ momentum.
Meanwhile, the current bearishness in the market might mean headwinds for Avalanche. The altcoin may rely on broad market trends for its upcoming price movements.
Final Thought
Avalanche failed to step up and crack the $127 level, even when Bitcoin saw an upward rally from $45.6K lows to $51K. For now, Avalanche will crash with a downward move by BTC. That can see bears dragging the alt for a close under $98 (under the channel). With that, AVAX will witness a freefall towards the $78 to $80 area.
