Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Bitcoin [BTC] The chart has seen a good performance, rising from $19.1k at $23.5k to register gains in excess of 22%. Ethereum [ETH]However, a better performance was achieved by. It rose 50% from $1040 up to $1540 in the same period.
This shift in momentum led to an increase in buyers for altcoins throughout the market and Avalanche. [AVAX] These coins included AVAX. AVAX broke above the past month’s highs at $22 to show bullish intent. Are the bulls losing steam or will the buyers soon push AVAX up to $28?
AVAX- 6-Hour Chart
Source: TradingView – AVAX/USDT
Two areas were highlighted in cyan or red as important on the chart. The $22 area had been a support zone in May and June but was quickly turned to resistance. It was also supported by the $26.4-28.5 area in May. However, it was quickly turned to resistance.
AVAX has posted impressive gains in the last week. Bulls also drove the price to $22 thanks to the high volume of trading. This was a sign of conviction. It was not clear if that conviction could propel AVAX beyond $28.
AVAX-2-Hour Chart
Source: TradingView – AVAX/USDT
Avalanche’s two-hour chart showed strong bullish momentum. The Relative Strength Index was well above 50, and the Supertrend indicators showed a buy signal. Despite pushing higher, the RSI made lower highs. This was a bearish divergence, which indicated that AVAX was likely to pull back.
The price of a buying opportunity might be $23.5 in the upper Supertrend with a stop loss below $22.7 in the lower Supertrend. The trader would have a low risk trade, provided that the position size is controlled. However, he or she could ride a push to the $28 area.
Also, the A/D line is climbing to indicate steady buying pressure. The StochasticRSI fell into the oversold zone, which could indicate a bullish crossover that could be used to consider entering long positions.
Conclusion
Bitcoin encountered resistance in the $24k range, and rejection could see altcoins tumble.
It was therefore prudent to exercise caution. If BTC falls below $22k, traders may have to shift their bias back towards bearish.
Bullish ideas could be invalidated if Avalanche slips below the $22 support level. However, AVAX maintained bullish momentum as of the writing.