Avalanche (AVAX) has fallen below the bearish pennant pattern as the Fed issues keep tumbling the crypto market. AVAX has dropped to around $30, a 6% decrease over 24 hours and its lowest level since last week.
AVAX is Showing Bearish Signals
Over the last 24 hours, the global crypto market cap has decreased by 2.27% to $1.25T. Over the past 24 hours, the total crypto market volume has reached $87.30B, an 11.24% increase.
Over the past week, AVAX formed a symmetrical triangle, which broke below the $33 level to the $30 demand zone. The Relative Strength Index (RSI) also fell into the oversold territory during the last couple of hours. However, it managed to bounce back up and show a value of 33.9.
Meanwhile, the momentum still favors the bears, and there is a bearish market structure developing due to the recent decline. In addition, AVAX has formed a bearish pennant pattern, a technical indicator that suggests that the price is heading for a significant decline.
The four-hour chart shows that the coin has been in a tight range over the past few days. It also shows that the coin has not moved above the 50-period and 25-period moving averages. The A/D indicator also started to show a steady decline as the crypto’s selling volume grew. AVAX could soon revisit the support levels established at $24 and $26.
Where AVAX is Headed
The Avalanche price is showing signs of a significant macro sell-off. It is currently trading at around $30, which is the lowest point of the decline as the one seen in May before a major decline began.
The price of Avalanche has entered a potential mudslide as indicated by the volume profile indicator. The pattern has been confirmed with a massive bearish volume spike.
The crypto’s following support level is expected to support the $12.50. The May 9 sell-off is also the biggest candle within the descending trend. It adds to the doubt about the future direction of the stock.
The thesis that the AVAX price could rise to $100 is not valid if the bulls breach the $56 level. A break above this level would imply that the bulls are more likely to target $100, which would result in a 250% gain.
The Entire Market is Showing Fear
According to Sam Kopelman, the manager of the crypto exchange, Luno, the crypto and bitcoin market is in a state of fear due to the collapse of US Treasury securities. He noted that the broader financial market’s volatility causes this fear.
On Wednesday, the US stock market fell sharply. The S&P 500 lost over 4%, while the tech-heavy Nasdaq fell 4.7%. Over the past couple of weeks, crypto investors have highlighted the near-term relationship between the stock market and bitcoin. The Federal Reserve’s rate hike and the reduction of its balance sheet have affected investors’ sentiment.
Due to the current fear in the crypto markets, investors are fleeing altcoins and putting their money into bitcoin. The move marks the coin’s relative strength, according to Kopelman.
Alex Kuptsikevich, a senior market analyst at FxPro, noted that the continued volatility in the markets and investor anxiety is likely to trigger a panic peak. He said that if the crash continues, bitcoin could fall to around $20,000.
Despite the lack of strong signs of a recovery in the markets, it is still impossible to see a sustained bounce back from last week’s lows. Therefore, we think that the next support area could be around $20,000, which coincides with the long-term support line of bitcoin.