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The Avalanche price dropped more than 4% over the past 24 hours, according to data from the cryptocurrency market tracking website CoinMarketCap. This drop in price resulted in the altcoin changing hands at $39.41 at press time.
AVAX’s 24-hour loss was a continuation of its negative streak as well. As a result, the Avalanche price was also down more than 13% on the weekly time frame.
The Avalanche Price Looks At Risk Of Dropping Below A Key Support Level
Daily chart for AVAX/USDT (Source: TradingView)
The Avalanche price is retesting the lower barrier of a medium-term positive price channel that had formed on its daily chart over the past few weeks. This specific channel saw AVAX’s value rise from a low of $12.29 on Nov. 7 to a high of $48.27 on Dec. 23. Since reaching this peak, traders have started offloading their holdings in the cryptocurrency.
This wave of sell pressure resulted in the formation of a bearish descending triangle on AVAX’s daily chart. Should this pattern be validated, the Avalanche price may drop below the base of the triangle pattern, which is situated at $37.15. A break below this significant price point may then be followed by the cryptocurrency’s value falling to the subsequent support level at $27 in the coming few days.
This bearish thesis could be invalidated if the Avalanche price is able to close the next 2 daily candles above $37.15. In this alternative scenario, the crypto could enter into a short-term bullish move towards the $52.60 resistance level.
Technicals Suggest AVAX’s Correction Is Not Over Yet
Technical indicators on AVAX’s daily chart suggested that AVAX’s negative trend may continue in the upcoming 48 hours. Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) indicators support a bearish outlook.
The MACD line is breaking away below the MACD Signal line. In addition to this, the slope of the MACD Histogram is negative. These two technical flags are generally indicative of a continuation of a bearish trend. Sellers also seem to have the upper hand against buyers, as the RSI line is positioned below the RSI Simple Moving Average (SMA) line.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Ecoinimist is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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