Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- The $13 support area was flipped to a resistance.
- Demand and volume in the futures market dipped.
Sellers consolidated more ground into August amidst uncertainty around Bitcoin [BTC]. Recent BTC price gyrations exposed most altcoins, including Avalanche [AVAX], to shed substantial value between mid-July and early August.
For perspective, AVAX was 20% lower after dipping from >$15.5 to below $13 at the time of writing.
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At the time of writing, BTC struggled to defend the $29.0k mark and could offer extra shorting opportunities if the weakening persists in the next few hours/days.
AVAX retests June/July support
Source: AVAX/USDT on TradingView
The $12 area has been a key support zone in June and July. Each retest saw AVAX rebound to $13.5 in the past two months, making it a key price reaction level. So, another price reversal could occur at this level.
But the weak BTC means the AVAX bulls could have difficulty reclaiming the bearish breaker of $12.9 – $13.4 (cyan). A price rejection at the overhead hurdle could offer another shorting opportunity. If so, $12.9 and the white range of $12.1 – $12.4 will be entry and take-profit levels, respectively.
But a close above $13.2 could invalidate the above bearish idea. In such a scenario, a session close above $13.2 will be the exit target, especially if BTC reclaims the previous range-low of $29.5k and $30k.
The Relative Strength Index (RSI) and Chaikin Money Flow (CMF) were below thresholds, confirming the prevailing selling pressure at the press time.
Volumes and demand declined in the futures market
Source: Coinalyze
Coinalyze confirmed the price chart’s bearish bias. Notably, AVAX recorded a volume decline as demonstrated by the negatively sloping Cumulative Volume Delta (CVD) that reinforces sellers’ dominance.
How much are 1,10,100 AVAXs worth today?
Similarly, Open Interest (OI) rates dipped further at the end of July but steadied between 1-3 August. The above metrics illustrate a bearish future market bias and reinforce sellers’ leverage.