Avalanche/Tether Market Overview

• Price dropped 6.6% in 24 hours, closing at $18.23 after peaking at $20.20.
• High volatility seen early in the session with a sharp pullback below key moving averages.
• Bullish and bearish divergences in volume suggest mixed sentiment and potential reversal risks.
• RSI in oversold territory, hinting at possible near-term support around $18.00–$18.20.
• Strong bearish engulfing patterns appear late in the session, reinforcing bearish momentum.

Avalanche/Tether (AVAXUSDT) opened at $19.52 on 2025-10-29 at 12:00 ET and traded between $18.14 and $20.20 over the 24-hour period, closing at $18.23 as of 12:00 ET on 2025-10-30. Total trading volume was 3,426,136.46 AVAX, with a notional turnover of $58,402,601.08 USD, indicating high liquidity and aggressive price movement.

Structure & Formations
The 24-hour candlestick pattern shows a sharp bearish reversal trend with a large bearish engulfing pattern near the end of the session. A key support level appears to have formed around $18.20–$18.40, as multiple candles bounced off this range. Resistance levels are now likely clustered between $19.50–$19.80 and $20.00–$20.10, where strong selling pressure emerged early in the session.

The price action suggests oversold conditions, and if this level holds, a rebound could test the 61.8% Fibonacci level at $18.70, which aligns with the 50-period moving average on the 15-minute chart. A breakdown below $18.10 would signal a deeper bearish phase, potentially targeting the 38.2% retracement at $17.90.

Moving Averages
On the 15-minute chart, the 20-period MA closed below the 50-period MA, confirming a bearish crossover. The 50-period MA sits at $18.55, while the 100-period MA is at $19.10, and the 200-period MA at $19.70, creating a clear downward bias. On the daily chart, the 50- and 200-day MAs are converging from above, suggesting the market is transitioning into a bearish trend.

MACD & RSI
The MACD line crossed below the signal line during the price drop, reinforcing the bearish momentum. The RSI dipped into oversold territory at 30, suggesting the price could stabilize in the short term. However, a sustained move below $18.10 may push the RSI below 25, indicating a deeper correction. The divergence between high volume and falling prices during the late session may signal an exhaustion of the bearish move.

Bollinger Bands
Volatility expanded during the sharp sell-off, with prices dropping outside the lower Bollinger Band. The 20-period Bollinger Band width increased by 15%, highlighting a period of high uncertainty. Price currently sits near the lower band at $18.20, with a potential bounce expected if the lower band holds. A break below would extend the downtrend, but would require a follow-through in volume and momentum to be confirmed.

Volume & Turnover
Trading volume spiked to $113,941 USD at $18.73 and $66,675 USD at $18.52, highlighting key price levels where liquidity dried up. Turnover remained strong during the selloff, particularly between $19.50–$19.20, indicating aggressive selling. The divergence between volume and price near the close suggests a potential short-term reversal, with a consolidation phase likely before the next leg down or bounce.

Backtest Hypothesis
To evaluate the potential profitability of a Bearish Engulfing pattern strategy, one could consider opening a short position upon pattern confirmation. Given the recent bearish engulfing pattern observed at $19.55–$19.29, a trade could be initiated with a 5-day fixed exit, a stop-loss at $19.50, and a take-profit target of $18.10. This approach aligns with the current oversold RSI and bearish MACD divergence, offering a balanced risk-reward setup. Testing this strategy over the 2022-01-01 to 2025-10-30 period would provide insight into the effectiveness of such a pattern in both trending and volatile markets.