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![Avalanche [AVAX]: Is demand strong enough to reverse the downtrend](https://cryptonoiz.com/wp-content/uploads/2022/05/PP-3-AVAX-cover-1000x600.jpg)
Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought of funding recommendation
Avalanche dropped under the $40 help space because the wave of promoting intensified in Might. The downtrend won’t be at an finish, amidst macroeconomic fears round inflation and Bitcoin being a risk-on asset in unsure occasions. Lengthy-term traders would possibly take a look at the $25 help space and see an incredible alternative to purchase the asset, but it surely needs to be remembered that typically it’s higher to purchase power than to purchase weak spot.
AVAX- 12 Hour Chart
Supply: AVAX/USDT on TradingView
The $24.14 stage of help is a stage that AVAX final traded at in August 2021. At the moment, AVAX was in a robust uptrend, and broke previous this stage and straight to $56, earlier than retesting the $40 space as demand.
The $24 and $40 areas of help and resistance had been established earlier, in February, and on the time of writing, these are the 2 areas that long-term traders of AVAX would want to be careful for.
Is AVAX at $24 a cut price purchase? It may very well be, for short-term scalpers. Nevertheless, long-term traders won’t be so positive. Beneath the $20-$24 space, the subsequent main long-term help lies on the $9-$12 space, which represents one more 50% loss.
Rationale
Supply: AVAX/USDT on TradingView
The day by day RSI was at 29.8, to point out robust bearish momentum. Regardless of the bounce from $24.14 to $$37, the RSI didn’t actually climb above the 30 mark. Additional north, the 40 stage might pose resistance and rejection, and additional bearish strain might turn out to be evident for AVAX within the days/weeks to return.
The Bollinger Bands width indicator has been climbing in latest weeks, in reflection of the robust transfer downward that AVAX noticed. The Aroon Indicator confirmed a gentle downtrend since April because the Aroon Down (blue) dominated. The A/D additionally slid decrease and decrease previously two months to point out better promoting strain.
Conclusion
A risk-averse investor would need to see some robust demand and the build-up of bullish power behind an asset earlier than feeling assured sufficient to purchase an asset. As issues stand, the technical construction of AVAX was bearish and an accumulation part didn’t appear to be on but.
