Market Overview for Avalanche/Tether (AVAXUSDT)

Summary
• Price climbed to $18.41 but retracted to $17.60 amid mixed volume flows.
• RSI overbought readings suggest momentum exhaustion, while 20SMA/EMA resistance held.
• Bollinger Band contraction during consolidation hinted at pending volatility.

Avalanche/Tether (AVAXUSDT) opened at $17.32 (12:00 ET - 1) and reached a high of $18.41 before declining to a low of $17.14 (12:00 ET), closing at $17.12. Total volume traded was 3,691,796.26 units, with notional turnover amounting to $63,269,294.25. The pair exhibited a volatile 24-hour swing, with price action fluctuating between key support and resistance levels.

Structure & Formations

Price action formed a bearish engulfing pattern near the $18.33 level, signaling a shift in momentum. The $17.75–17.85 range acted as a key pivot zone, and a large-bodied candle closed at $17.12 after breaking through the 16:45 ET support level. A potential double-top structure was evident between $18.00 and $18.10, with a bearish continuation likely if the $17.60–17.70 zone fails to hold.

Moving Averages

On the 15-minute chart, the 20SMA/EMA hovered near $17.85–17.90, which resisted price action in the early part of the session. By late morning, the 50SMA shifted to a bearish bias as price dropped below. On the daily chart, the 50DMA crossed below the 100DMA, signaling a bearish bias and confirming a shift in medium-term sentiment.

MACD & RSI

The RSI hit overbought territory above 70 during the $18.41 high but quickly reversed downward, hinting at a bearish divergence. MACD remained in negative territory, with a bearish crossover confirming the loss of bullish momentum. This suggests a potential continuation of the downward trend in the near term.

Bollinger Bands

Volatility expanded during the morning surge, with price peaking near the upper band at $18.41. A contraction occurred between 15:00 and 16:30 ET, suggesting a buildup for a potential breakout. By the end of the session, price settled near the lower band, indicating oversold conditions and a potential rebound into the $17.75–17.85 range.

Volume & Turnover

Volume spiked during the $18.33–18.41 push, confirming the strength of the short-term move. However, a significant divergence occurred after 20:00 ET, as volume waned despite continued price declines. Notional turnover mirrored the volume trends, with the largest outflows recorded during the 22:30–23:45 ET period. The lack of follow-through volume during the decline signals weakening bearish conviction.

Fibonacci Retracements

A key 61.8% Fibonacci retracement level at $17.70 was broken decisively, validating a deeper correction. The 50% retracement level at $18.06 acted as resistance during the morning sell-off. On the 15-minute chart, a 38.2% retracement at $18.20 failed to hold, confirming bearish control in the short term.

Backtest Hypothesis

To build a robust backtesting framework, we can apply RSI overbought conditions (RSI > 70) to identify potential short entries in AVAXUSDT. A sell exit rule could be triggered when price drops 3% from the high of the entry bar, effectively aligning with key support levels identified in today's analysis. This strategy could be backtested from 2022-01-03 to 2025-11-07 to evaluate its profitability and risk profile under historical volatility and trend conditions.