Avalanche (AVAX) is one of the cryptos that was hit the hardest in the June 18 liquidation. However, an interesting new trend has formed on its charts over the last few weeks.
It is beginning to appear that the avalanche's price could be bottoming out at its current price level. The cryptocurrency currently sits at a critical point and could take an even harder hit if it goes below its current range.
Judging by the Fibonacci retracement levels from April to June, one can observe that the current decline sits at a critical level. According to this tool, the avalanche price could be at its support already or close to it.
Practitioners of the Elliott wave theory also corroborate this account of events. At this point, the avalanche price must find support and push back against the bears. As if the Fibonacci tool and Elliott wave model aren't enough, the relative strength index and the volume profile indicator also support this idea of a potential market bottom for AVAX.
If the bottom is close, we could see the price of avalanche rally to as high as $37. Almost twice its current price. The possibility of this upward rally depends on the swing low on its charts around June 18th, Just before the dip. The swing low sits at $13.79 and must remain unbroken.
To be sure, one is absolutely safe from potential downtrends. However, the $17.25 level is an important point to watch. A break below this level might suggest further downtrend continuation. The price of AVAX has fallen by 3.34% over the last 7 days but has increased by 6.51% over the last 24 hours.
Zooming out to the 1-hour timeframe, you can see that avalanche now sits at $19.96 and is currently testing the resistance of a downward channel it started on the 8th of august 2022.
It is currently testing the 0.76 Fibonacci level at $19.95: A level last tested as support in July. Avalanche may see a short-term move to the $21.74 very soon.
The cryptocurrency price is currently consolidating, but if this consolidation ends above the $18.89 – $19.95 levels, then there are good chances that a bounce and a bullish move to the upside will occur.
The avalanche chain created several records in august, which may attract lower-level buyers. However, while things look promising for the cryptocurrency, its sentiment is not all positive.
For example, the avalanche's total locked value (TVL), which had recovered a bit to $3.44 billion in august, has dropped below $2 billion.
If the price starts to come down from where it currently sits, the bears will take this as an opportunity and try to sink it below $13. If this happens, a downtrend appears in full, taking the price to $9 or even lower.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)