Avalanche Price Αnalysis: AVAX Rally Falters At $60, Time To Sell?
- Avalanche has recently attained a new all-time high at $67, but a correction to $35 looms.
- A declining social chatter around AVAX shows that the pull on the downside could be more significant in the coming sessions.
Avalanche’s performance has left many investors excited because the widespread losses did not considerably hamper the progress made in the last nearly two and a half months. High support at $34 ensured that losses were limited. Investor speculation also spiked, with AVAX staying vividly bullish, a situation that bolstered the price above $60.
A new all-time high was recently achieved at $67, but Avalanche cut the rally, resulting in declines under $60. Currently, the token is trading at $54 after bouncing off support at $50.
Avalanche Price Wobbles between $50 and $60
A golden cross pattern came into the picture in early September, allowing bulls to take control entirely. This pattern comes into the picture when a 50-day moving average crosses above the longer-term 200-day SMA. Usually, in a downward market, the 50 SMA trails below the 200 SMA. As the downward pressure fades, the short-term moving average crosses above the longer-term moving average, identifying the impending flip from bearish to bullish.
While the golden cross does not signify entry positions or targets, it signals traders to look for entry points. Avalanche’s daily chart shows the formation of a golden cross pattern. With this pattern intact, traders will validate the uptrend, allowing the price to consolidate at a higher level. At times, the golden cross marks the beginning of a bull market.
AVAX/USD Daily Chart
Meanwhile, on-chain data shows that the number of AVAX-related mentions on different social media networks increased to 71 in volume during the first week of September. The rising chatter around the token saw Avalanche become a highly sought-after crypto asset by retail investors. However, the volume plunged soon after, leading to another dip in price to $35.
Realize that increased attention is not necessarily a good sign for the continuation of the uptrend.
When prices pump, and the crowd starts paying attention, then the dump usually follows shortly after. Hence, AVAX will likely consolidate between $50 and $60 in the coming days. A daily close below $50 might trigger more losses toward $35.
Avalanche Social Volume
The four-hour chart shows a bearish Moving Average Convergence Divergence (MACD) indicator. With the 12-day SMA below the 26-day EMA, the chances of the downtrend carrying on toward $35 are high.
AVAX/USD Four-Hour Chart
As per the Relative Strength Index (RSI), the tug of war between the bears and the sellers seems to be canceling out. As long as the RSI remains sideways, price action will be undefined in the short term. Nonetheless, a movement toward the oversold region will pave the way for the declines, as discussed.