Market Overview for Avalanche (AVAXUSD): Volatility, Pullback, and Momentum Divergence

• AVAXUSD declined to a 24-hour low of $22.64 before rebounding above $24.00.
• Volume surged during the rebound, but turnover remained low due to smaller trade sizes.
• A bearish engulfing pattern formed during the early drop, followed by a bullish recovery into the session close.
• RSI hit oversold levels, hinting at short-term buying interest, but momentum remains mixed.
• Bollinger Bands expanded during the sharp decline, signaling a period of heightened volatility.

Avalanche (AVAXUSD) opened at $23.84 on 2025-09-01 16:00 ET, reached a high of $24.22, and a low of $22.64, closing at $23.87 at 12:00 ET on 2025-09-02. Over the 24-hour period, total volume amounted to 185.78, with a notional turnover of $4,484.07. The price action displayed clear signs of short-term volatility and momentum shifts.

Structure & Formations

The daily structure showed a key bearish engulfing pattern at $23.10, confirming a shift in sentiment during the sharp decline. A recovery followed, with the price testing the 24.00–24.22 range, forming a bullish reversal pattern. A 61.8% Fibonacci retracement level from the $22.64 low to the $24.22 high currently resides near $23.90–23.95, suggesting a potential support zone for further consolidation. A breakdown below $22.64 could trigger a retest of earlier support levels.

Moving Averages

On the 15-minute chart, the 20-period MA crossed below the 50-period MA, indicating short-term bearish momentum. However, the price crossed back above the 50-period MA near the end of the session, suggesting a possible short-term reversal. On the daily chart, the 50-period MA is above the 100- and 200-period MAs, signaling a longer-term bullish trend, though the recent pullback may test this structure.

MACD & RSI

The MACD turned negative during the sharp decline but showed a bullish crossover near the 24.00 level, confirming the rebound. The RSI hit an oversold level of 28, bouncing back toward the 50–55 range, suggesting a short-term re-balancing of buying and selling pressure. Divergence between price and RSI during the rebound may indicate caution, though it does not confirm a full reversal.

Bollinger Bands

Bollinger Bands expanded significantly during the pullback to $22.64, reflecting a burst of volatility. The price closed near the upper band after the rebound, suggesting strength in the recovery. However, a breakdown below the lower band could reignite the downward move, while a sustained close above the upper band may validate a short-term bullish breakout.

Volume & Turnover

Volume spiked during the sharp drop to $22.64 and during the rebound above $24.00, with a large 15.35-volume candle confirming the initial decline and a 85.31-volume candle confirming the rebound. Turnover remained muted due to smaller trade sizes, indicating retail participation rather than large institutional buying or selling. The divergence between high volume and low turnover suggests fragmented trading interest.

Fibonacci Retracements

Key Fibonacci levels from the recent swing low ($22.64) to the swing high ($24.22) include 38.2% at $23.47 and 61.8% at $23.90–23.95. The price found support near the 61.8% level during the recovery, which may now act as a short-term floor. A breakdown below $23.47 could lead to further testing of $23.10 and $22.64.

Backtest Hypothesis

A backtest strategy involving entry at the 61.8% Fibonacci retracement level, with a stop-loss below the 38.2% level, may capture a short-term bounce. MACD crossovers and RSI divergence could be used to refine timing. Given the current structure, a bullish bias may be justified for traders aiming to profit from the potential continuation of the $24.00–24.22 consolidation. This strategy could be validated over the next 24–48 hours, with a target toward $24.50 and a stop-loss near $23.50.