Market Overview for Avalanche/Tether (AVAXUSDT) – 2025-09-21

• Price dipped sharply to 32.70 before rebounding, forming a potential bullish reversal pattern near the 33.00 level.
• Volume surged during the decline and remains elevated post-rebound, indicating strong participation in both directions.
• RSI hit oversold territory below 30, suggesting near-term buying interest could resume.
• Bollinger Bands narrowed before the drop, then expanded, highlighting a period of high volatility.
• A 15-minute engulfing pattern formed during the bounce, signaling possible short-term momentum reversal.

Avalanche/Tether (AVAXUSDT) opened at $33.71 on 2025-09-20 at 16:00 ET and closed at $32.86 on 2025-09-21 at 12:00 ET, with a high of $33.76 and a low of $32.68. Total volume for the 24-hour period was 639,527.94 AVAX, with notional turnover reaching approximately $21.1 million. Price action featured a sharp selloff mid-cycle followed by a partial recovery, suggesting potential near-term equilibrium in the $32.90–33.10 range.

Structure & Formations

Price action revealed a strong short-term bearish bias early in the session, with a breakdown below the 33.00 psychological level. The lowest point of the session at $32.68 served as a key support, from which a rebound emerged. A 15-minute engulfing pattern at the bottom of the selloff (09:15–09:30 ET) indicates a potential short-term reversal. A doji formed near $33.00 later in the session, suggesting indecision among traders as buyers regained control.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages remained bearish through the selloff, with price closing below both. However, a cross above the 50-period line in the final hours suggests a possible shift in momentum. On the daily chart, AVAXUSDT remains below its 50-day and 200-day moving averages, confirming a medium-term bearish trend but hinting at a potential near-term bounce from oversold conditions.

MACD & RSI

The RSI indicator pushed into oversold territory (below 30) during the selloff and has since returned to mid-30s, suggesting the possibility of near-term buying interest. The MACD crossed below the signal line mid-session and remained negative through most of the period, aligning with the bearish bias. However, a divergence appeared as price hit a low while the MACD did not make a new low, signaling potential short-term stabilizing momentum.

Bollinger Bands

Volatility was unusually compressed before the sharp selloff, with the Bollinger Band width narrowing significantly from 09:00 to 09:45 ET. The breakdown below the lower band at $32.68 marked a volatility expansion. Price has since bounced back into the lower half of the bands, suggesting the move may not be fully exhausted but could face resistance near the middle band (~$33.04). A break back above the upper band would require a surge in volume and sentiment.

Volume & Turnover

Volume spiked during the initial selloff, particularly in the 09:00–10:00 ET window, with a 15-minute candle at 09:45 ET showing $58k in notional turnover. After the rebound, volume remained elevated but decreased slightly, suggesting buyers are stepping in selectively. Turnover also diverged slightly from price during the rebound, with volume not surging as sharply as might be expected from a strong reversal, indicating some caution in the buying interest.

Fibonacci Retracements

Key Fibonacci levels from the 32.68–33.52 swing show 38.2% at $32.95 and 61.8% at $33.22. Price has bounced just below the 38.2% level and may find near-term support there. A sustained move above $33.22 would signal a retest of the 33.52 high and could indicate a shift in short-term sentiment from bearish to bullish consolidation.

Backtest Hypothesis

The backtest strategy proposes using a combination of RSI divergence and Bollinger Band contractions to time entries. A sell signal is generated when RSI forms a bearish divergence and the Bollinger Band width narrows below a 5% threshold. A buy signal follows a bullish divergence and a volatility expansion above 5%. Given the current RSI divergence and recent volatility expansion, this model would have triggered a short near $32.70, with a target near $32.60 and a stop just above $33.05. The current price recovery into the 32.90–33.00 range suggests a favorable risk-reward profile for this approach.