Avalanche’s AVAX price may be headed for pain as the bull’s attempt to rally higher post-weekend decline shows weakness. Key levels have been defined.
AVAX price shows weakness
Avalanche price demonstrates reasons to believe in a further downtrend in the days to come. AVAX, the Ethereum-based gaming token, witnessed a 6% decline during the third weekend of October. On Monday’s opening bell, the bulls took charge and managed to recover nearly all of the weekend’s losses.
Avalanche price currently auctions at $16.14 as the bulls have produced a bowllike-ramping pattern that pattern traders would deem as undeniably bullish. Additionally, the bulls breached the 8-day exponential moving average (EMA) during Monday’s uptrend.
Still, the Relative Strength Index (RSI) paints a different narrative. The RSI is at the ideal level for bears to enter the market. Compounding the bearish idea is a very obvious bearish divergence displayed between the current price and the Thursday night high at $16.35. Although the bulls have hurdled the 8-day EMA, clear sell-signal candlesticks are surfacing near the current auctioning price.
Additionally, the Volume Profile Indicator remains sparse amidst the bullish retaliation. The indicator may be a hint of a lack of bullish confidence.
Failure to hold above the 8-day EMA at $15.80 will wreak havoc on the AVAX price. If the failure occurs, the bears will likely sweep the lows at $14 and may finally tag the long-anticipated liquidity levels near $10 in the coming weeks.
Invalidation of the bearish thesis is a breach of the October 10 high at $17. If the bulls manage to tag the invalidation level, a buyer’s frenzy with targets at the $20 congestion zone could occur. Such a move would result in a 24% increase from the current Avalanche price.