Market Overview for Avalanche/Tether (AVAXUSDT) – 2025-10-12

• Price dropped from $22.94 to $20.82 before rallying back above $21.30; bears briefly controlled key support levels.
• RSI and MACD signaled oversold conditions around $20.90, with a bear trap possible in late hours.
• Bollinger Band contraction observed before 04:00 ET, followed by a breakout to the upside.
• Trading volume surged during the 15:00–16:00 ET session, confirming a bullish reversal.
• Fibonacci levels at $21.55 (38.2%) and $22.23 (61.8%) appear to act as key psychological thresholds.

Avalanche/Tether (AVAXUSDT) opened at $22.94 on 2025-10-11 at 12:00 ET, hit a high of $22.56, a low of $20.82, and closed at $22.37 on 2025-10-12 at 12:00 ET. Total 24-hour volume was 3.24 million contracts, and notional turnover reached $67.12 million.

The structure of the 24-hour price action indicates a complex bearish-to-bullish transition. After an initial drop in the early evening hours, price found support near the $21.20 level and began a gradual recovery. A bullish engulfing pattern formed around $21.23–$21.36, followed by a strong volume surge and a breakout above the upper Bollinger Band. Key resistance levels were identified at $22.13 and $22.37, with support near $21.09 and $20.82. A long-legged doji appeared around 08:00 ET, signaling indecision before the final upward move.

Moving averages show AVAXUSDT closing above its 50-period and 20-period SMAs on the 15-minute chart, reinforcing short-term bullish momentum. The 50-period daily SMA remains above $22.00, suggesting the broader trend remains mixed. The MACD line crossed above the signal line in the late hours, indicating renewed bullish momentum. RSI reached oversold levels near $20.82 and recovered back into neutral territory, supporting the idea of a short-term bounce.

Bollinger Bands contracted between 03:00–04:00 ET before expanding sharply during the breakout. Price remained within the bands for most of the session, suggesting contained volatility until the final hours. The 21.0–22.4 range acted as a primary volatility channel, with the closing price near the upper end of the distribution. Volume and turnover were both highest between 15:00–16:00 ET, confirming the final rally.

Fibonacci retracement levels derived from the $22.94–$20.82 swing show potential turning points. The 38.2% retracement at $21.55 acted as a short-term support during the recovery phase, while the 61.8% retracement at $22.23 provided a temporary ceiling. Price closed just above the 78.6% level at $22.37, hinting at a potential test of the $22.50 area in the next 24 hours. Daily Fibonacci levels also showed a 50% retracement at $21.88 and a 61.8% at $22.39, aligning with recent resistance.

Backtest Hypothesis

A potential backtesting strategy could involve entering long positions when the price breaks above the upper Bollinger Band after a period of contraction, as seen around 04:00–06:00 ET. This breakout should be confirmed by a bullish engulfing pattern and increased volume, both of which were observed. A stop-loss could be placed just below the 38.2% Fibonacci retracement level ($21.55), while a target could be set at the 78.6% level ($22.37). A trailing stop could then follow as price moves above $22.37, with a primary target at the 127.2% extension near $22.65. This strategy would aim to capitalize on short-term volatility and trend continuation, with position sizing adjusted according to risk parameters.