Avalanche (AVAX) bulls ought to brace themselves for influence led by a rising divergence between a number of key indicators on the daily-timeframe chart.
AVAX worth chart paints bearish divergence
The day by day AVAX chart reveals a traditional bearish divergence between its worth and relative energy index (RSI), a momentum oscillator forming since Jan. 11.
In different phrases, the value of AVAX has been making greater highs because the mentioned date. However, then again, the coin’s day by day RSI has been forming decrease highs. This divergence suggests a slowdown within the momentum of the AVAX/USD pair, which can result in a worth reversal.
AVAX/USD day by day worth chart. Supply: TradingView
As well as, the declining volumes in the course of the course of AVAX’s ongoing uptrend additionally trace on the identical bearish cues.
The worth-RSI and price-volume divergences seem as AVAX worth continues its 2023 uptrend. Notably, Avalanche has rallied by greater than 100% year-to-date to $22.50 as of Feb. 2, helped by bettering risk-on sentiments and information of its partnership with Amazon.
On Jan. 31, Avalanche partnered with Intain, a structured finance platform that facilitates greater than $5.5 billion in belongings throughout greater than 25 offers to run its digital market IntainMARKETS by way of IntainMARKETS Subnet.
The worth of AVAX rallied almost 20% after the announcement.
AVAX’s worth dangers drop 30% in February
AVAX’s worth has efficiently closed above two key resistance ranges: a multi-month descending trendline (blacked) and its 200-day exponential shifting common (200-day EMA; the blue wave) in the course of the ongoing rally.
AVAX/USD day by day worth chart. Supply: TradingView
Avalanche now eyes a breakout above $22.75, which has been serving as resistance since August 2022, for a possible breakout to $30 as its subsequent upside goal. This degree additionally coincides with the falling wedge breakout goal mentioned on this evaluation.
In different phrases, an roughly 30% achieve from the present worth ranges.
Conversely, a pullback from the resistance degree, fueled by the bearish divergence indicators mentioned above, may ship AVAX’s worth towards its 50-day EMA (the crimson wave) at roughly $15–$16, down about 30% from present costs.
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer entails danger, and readers ought to conduct their very own analysis when making a choice.
https://cointelegraph.com/information/avalanche-bull-trap-risks-pushing-avax-price-down-by-30-in-february