An anonymous cryptocurrency analyst tweeted that losing 90% of your favorite cryptocurrency does not prevent it from losing another 90%. Indeed, investors should be skeptical of Twitter posts, particularly those from anonymous users. This narrative, however, occurred during in the 2018 market crash and may occur again during this cycle. Avalanche is one of the tokens experiencing massive price drops. Since the beginning of May, AVAX has fallen by approximately 76%.
Surprisingly, the alternate solution token has nothing to prevent it from losing another 40%. Meanwhile, technical support floors under $14.6 are $9.7, followed by $5.1. As Bitcoin falls below $20,000, Avalanche remains vulnerable to further declines.
AVAX Timeframe of One Day
At $14.67, Avalanche has long-term horizontal footholds, followed by $9.69. Meanwhile, the previous support level of $23.22 held for about a month before being breached by increased selling pressure. Surprisingly, even on shorter timeframes, the alt lacked a bullish outlook. AVAX encountered near-term resistance at the value levels of $20 and $18.8.
Late in March, Avalanche began its downward trend. Meanwhile, the token reached highs of $103.2 after rallying from a support floor of $66.6. In April and May, the markets were dominated by sellers, and Avalanche has lost about 84% of its value since the early April sessions.
A significant increase above $28 is required for Avalanche to change its long-term outlook to bullish. That would also imply keeping the $23 mark as support. Meanwhile, a move above $18.9 could shift Avalanche’s shorter-term bias to the positive.
The daily Relative Strength Index was hovering around 30.2, indicating extreme bearishness. For the past two months, the indicator has failed to rise above 40. Furthermore, there was no bullish divergence. Furthermore, the on-balance volume lost a key market that it had held since February.
The falling OBV highlighted increased selling quantity, and the downside could continue unless the OBV rises significantly. Furthermore, the Chaikin Money Flow has remained below -0.05 since April, with only a few forays into the zero zone. This confirmed that a lot of money was leaving the market.
Avalanche indicators confirmed the ongoing selling pressure and bearish strength. The altcoin has yet to show signs of a comeback to $20 or higher. Furthermore, bears dominated market structure. As a result, a session closing below $14.6 may present a shorting opportunity. Moving towards 20, plus a hidden bearish divergence, may also provide shorting opportunities.