Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- AVAX’s MFI was in an overbought zone and is ripe for a possible price reversal
- But, a break above $12.10 would invalidate this bearish forecast
Avalanche’s [AVAX] After rising from $10.71 – $12.30, the 2023 rally gained more than 14%. The price correction ended at $11.45.
AVAX was experiencing another uptrend as of press time, but it faced a challenge from Bitcoin. [BTC] $17K resistance failed to be overcome. AVAX was trading at $11.77. If the BTC price correction continues, it could fall to $11.45 support.
Read Avalanche’s [AVAX] Price Prediction 2023-24
The bulls can aim for $12.10 as the target.
Source: AVAX/USDT TradingView
AVAX fell below its late December trading range of $11.59 – $11.85 but found solid support at $10.71. The new year saw a double bottom that set the stage for price recovery.
AVAX faced a bearish block at $12.10 which forced it to make a price correction. However, support at $11.45 kept the price under control.
It may be difficult to see a price recovery in the press time, as the Money Flow Index has reached too high territory. This could indicate that accumulation has reached its peak and distribution may be underway. This could lead to a price rebound.
At the midpoint, the Relative Strength Index(RSI) was rejected. However, it moved slightly upward and sideways. The On-Balance Volatility (OBV), also fell slightly. This was a sign that the bulls had not been able to reach the $12.10 mark, as the buying pressure has gradually increased following a steep decline.
AVAX may fall to $11.59 or $11.45. At these levels, short sellers can sell high but buy back lower.
The forecast would be invalidated if the price breaks above the $12.10 bearish or order block. This could enable AVAX bulls, particularly if BTC is bullish, to target $12.46.
AVAX’s OI fell, but its outlook and demand in the futures market remained unchanged
Source: Coinglass
According to Coinglass, AVAX’s open interest increased from mid-December and appeared to have peaked at press time. This indicates that AVAX witnessed an increase in money flowing into futures and options markets.
However, the decline in AVAX’s OI at press time suggests that more money was leaving the futures market.
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Nonetheless, AVAX’s sentiment remained positive, and demand in the derivatives market remained unchanged, as evidenced by the positive and unchanged Binance Funding Rate for the AVAX/USDT pair.
Source: Santiment
If BTC fails to recover, AVAX could rally. Investors should be aware of BTC before taking any actions.