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Avalanche (AVAX) Price Could Face a Sell-off in the Near Future

The price of Avalanche (AVAX) has created a deviation above the important resistance zone and indicates decisive bearish signals. It is expected to continue declining in the near future.

Weekly Outlook

The price of Avalanche (AVAX) broke above the significant resistance zone of $55 during the week of March 11 to 17, 2024. This action marks the continuation of the previous uptrend with a potential target of $100.

However, the upward momentum was not sustained as the AVAX price fell back below the $55 zone this week. This indicates a false breakout and is often followed by sharp declines.

The weekly RSI indicator has created a significant bearish divergence (red line) and crossed below the 70 level, signaling that the bears have regained control.

Therefore, the AVAX price is likely to continue declining towards the 20-week EMA line at $39, where it previously provided support during the previous decline (blue arrow). This figure corresponds to a decrease of 16.12% from the current price level.

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AVAX/USDT weekly chart. Source: TradingView

Short-Term Support Breakdown

The daily chart shows that the AVAX price broke down below the short-term horizontal support zone at $50 on April 2.

Since this zone has provided support for the price from March 13 to April 1, breaking below it may have triggered short-term traders’ stop-loss points. This could lead to a sharp decline in the near future.

The daily RSI indicator has broken below the ascending support line, crossed below the 50 level, and sloped downwards, supporting the possibility of further decline.

If a sell-off occurs, the AVAX price could decline to the horizontal support zone at $35, which is 25.83% lower than the current price level.

AVAX/USDT daily chart. Source: TradingView

Conclusion

The most likely prospect indicates that the AVAX price will continue to decline in the near future. The nearest target is the 20-week EMA line at $39 and lower towards $35.

The bearish outlook will be invalidated if the AVAX price closes the weekly candle above the $55 zone once again.

Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.

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