Avalanche's AVAX Token Shows Bullish Signs Amidst Bearish Market
1min read Avalanche (AVAX), the native token of the Avalanche blockchain, has been displaying intriguing price movements recently, suggesting a potential bullish divergence amidst the ongoing bearish trends in the cryptocurrency market. The coin's price has been struggling throughout February, which could provide traders with valuable insights into future resistance and support levels.
Analysts at COINOTAG have noted that a market structure shift for avax would occur when the token can set higher swing highs and lows. This observation is crucial for traders to monitor, as it could indicate a change in the token's overall trend.
Avalanche's current market trend is reflective of broader bearish sentiments within the cryptocurrency sector. The 100% retracement level at $22.35, which previously marked the November lows, has now flipped to become a significant resistance level. The next key support for AVAX is observed at $19.73, a point of historical significance that traders should monitor closely.
As AVAX prices approached the $20 psychological level, a key technical indicator, the Moving Average Convergence Divergence (MACD), drew attention. The price action exhibited lower lows, while the MACD suggested higher lows, indicating a possible bullish divergence. Such a divergence can often signal that a price bounce is on the horizon, offering a potential trading opportunity. However, it is essential to underscore that this situation does not guarantee an immediate reversal of the existing downtrend.
Recent liquidation data indicates that $27.4 is a strong resistance zone for AVAX, making the $23.7-$24 region a viable short-term target for traders. As market conditions fluctuate, traders should also be aware of the potential volatility stemming from Bitcoin's (BTC) price movements, particularly its recent rebound above $85k. With the imminent risk of a BTC price drop, there remains a possibility for AVAX to revisit the $19.7-$20 support region. Hence, employing careful risk management strategies would be prudent for those trading in these uncertain conditions.
In summary, the AVAX market exhibits signs of crucial resistance and support levels which traders must pay close attention to. The potential for a price bounce is hinted at by bullish divergences in momentum indicators, though a shift in overall market structure is essential for a sustained recovery. By keeping 