- Avalanche price has lost support from the 8-day and 21-day simple moving averages.
- AVAX price has also breached the 61.8% Fibonacci level with an uptick in volume.
- Invalidation of the bearish thesis is a closing candle above $20.68.
Avalanche price shows reasons to believe that a sweep-the-lows event could occur. Key levels have been identified.
Avalanche points south
Avalanche price is starting the first trading week of September on a bad foot. Throughout the month, the AVAX price has been consolidating within a downtrend near the mid $18 zone. A Fibonacci retracement tool surrounding the entirety of the summertime uptrend suggests the consolidation was merely a 61.8% retracement level. The bear’s failure to close below the $18.75 zone was an optimistic signal.
On June 6th, the bears managed to disbar the optimism as they breached the 61.8% FIB and forged a daily settle at $18.20. The breach of the fundamental FIB level was catalyzed earlier in the day, as the bulls were rejected at the 50% FIB marked $20.61 Both the 8-day and 21-day simple moving averages failed to provide support. At the same time, an influx of bearish transactions poured in on the Volume Profile Indicator. Consequently, AVAX lost 10% of its market value in just one day.
When combining these factors, AVAX, the Ethereum-based digital gaming token, could show early signs of a sweep-the-lows event targeting $13.79. If the bearish thesis is correct, the bulls may avoid stepping in until a capitulation near the $10 occurs. Such a move would result in a 40% decline from the current Avalanche price.
Invalidation of the bearish thesis is a closing candle above the 50% fib level marked $20.68. If the bulls can hurdle this barrier, they could induce a 30% rally targeting $23.