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- The higher time frame market structure was bearish, but the momentum is starting to change.
- Lack of demand was a concern and reinforced the bearish bias.
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AVAX price action has turned bullish in the short-term over the past week, but the higher time frame trend remains bearish. Traders can use the looming resistance areas to formulate their AVAX trading plans.
The momentum has shifted in favor of the bulls.
Source: AVAX/USDT on TradingView
The Relative Strength Index on the daily chart was above the neutral 50 level, indicating a change in momentum. This may be an early sign of recovery, but price action has remained strongly bearish. The closest significant low high is $34.
A move above this level would initiate a change to the upside. However, to support this kind of price advance, the OBV needs to trend upward. At the time of writing, it remains in a downward trend.
The buying volume has not been large enough yet and therefore, the bias on the daily time frame remains bearish. Fibonacci retracement levels (pale yellow) showed that a bearish reversal is expected at the $34.8 and $37.9 levels.
AVAX short-term sentiment was bullish
source: Quinalis
Although the higher time frame trend was bearish, lower time frame traders took advantage of the recent price bounce. Open interest increased from $140.2 million to $181.1 million at press time.
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On the other hand, the CVD spot price continued to move sideways. Together, these indicated speculative interest but a lack of organic demand, raising the possibility that the higher time frame downtrend remains strong.
Traders can expect the bears to control the decline above the $30 level, but a move beyond $34 and $37.8 would negate the downtrend.
Disclaimer: The information provided does not constitute financial, investment, trading or any other type of advice and is solely the opinion of the author.
